10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2023

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-13337

STONERIDGE, INC

(Exact name of registrant as specified in its charter)

Ohio	34-1598949
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
39675 MacKenzie Drive, Suite 400, Novi, Michigan	48377
(Address of principal executive offices)	(Zip Code)

(248) 489-9300

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, without par value	SRI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

xYes oNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

xYes oNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x	Non-accelerated filer o
Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period     for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). oYes xNo

The number of Common Shares, without par value, outstanding as of April 28, 2023 was 27,513,330.

STONERIDGE, INC. AND SUBSIDIARIES

INDEX		Page
PART I–FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	4
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2023 and 2022	7
	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the Three Months Ended March 31, 2023 and 2022	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II–OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

2

Forward-Looking Statements

Portions of this report on Form 10-Q contain “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this report and may include statements regarding the intent, belief or current expectations of the Company, with respect to, among other things, our (i) future product and facility expansion, (ii) acquisition strategy, (iii) investments and new product development, (iv) growth opportunities related to awarded business and (v) operational expectations. Forward-looking statements may be identified by the words “will,” “may,” “should,” “designed to,” “believes,” “plans,” “projects,” “intends,” “expects,” “estimates,” “anticipates,” “continue,” and similar words and expressions. The forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among other factors:

•the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis, including the impact of potential tariffs and trade considerations on their operations and output;

•fluctuations in the cost and availability of key materials (including semiconductors, printed circuit boards, resin, aluminum, steel and copper) and components and our ability to offset cost increases through negotiated price increases with our customers or other cost reduction actions, as necessary;

•global economic trends, competition and geopolitical risks, including impacts from the ongoing conflict between Russia and Ukraine and the related sanctions and other measures, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries;

•our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions;

•the impact of COVID-19, or other future pandemics, on the global economy, and on our customers, suppliers, employees, business and cash flows;

•the reduced purchases, loss or bankruptcy of a major customer or supplier;

•the costs and timing of business realignment, facility closures or similar actions;

•a significant change in automotive, commercial, off-highway or agricultural vehicle production;

•competitive market conditions and resulting effects on sales and pricing;

•foreign currency fluctuations and our ability to manage those impacts;

•customer acceptance of new products;

•our ability to successfully launch/produce products for awarded business;

•adverse changes in laws, government regulations or market conditions, including tariffs, affecting our products or our customers’ products;

•our ability to protect our intellectual property and successfully defend against assertions made against us;

•liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers;

•labor disruptions at our facilities or at any of our significant customers or suppliers;

•business disruptions due to natural disasters or other disasters outside of our control;

•the amount of our indebtedness and the restrictive covenants contained in the agreements governing our indebtedness, including our revolving Credit Facility;

•capital availability or costs, including changes in interest rates or market perceptions;

•the failure to achieve the successful integration of any acquired company or business;

•risks related to a failure of our information technology systems and networks, and risks associated with current and emerging technology threats and damage from computer viruses, unauthorized access, cyber-attack and other similar disruptions; and

•the items described in Part I, Item IA (“Risk Factors”) in the Company’s 2022 Form 10-K.

The forward-looking statements contained herein represent our estimates only as of the date of this filing and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements or otherwise.

3

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STONERIDGE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35,165	$	54,798
Accounts receivable, less reserves of $853 and $962, respectively	175,666		158,155
Inventories, net	168,701		152,580
Prepaid expenses and other current assets	43,604		44,018
Total current assets	423,136		409,551
Long-term assets:
Property, plant and equipment, net	107,591		104,643
Intangible assets, net	45,585		45,508
Goodwill	34,659		34,225
Operating lease right-of-use asset	13,352		13,762
Investments and other long-term assets, net	46,415		44,416
Total long-term assets	247,602		242,554
Total assets	$	670,738	$	652,105
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of debt	$	1,456	$	1,450
Accounts payable	131,996		110,202
Accrued expenses and other current liabilities	68,547		66,040
Total current liabilities	201,999		177,692
Long-term liabilities:
Revolving credit facility	167,393		167,802
Deferred income taxes	8,310		8,498
Operating lease long-term liability	10,043		10,594
Other long-term liabilities	6,750		6,577
Total long-term liabilities	192,496		193,471
Shareholders' equity:
Preferred Shares, without par value, 5,000 shares authorized, none issued	—		—
Common Shares, without par value, 60,000 shares authorized, 28,966 and 28,966 shares issued and 27,513 and 27,341 shares outstanding at March 31, 2023 and December 31, 2022, respectively, with no stated value	—		—
Additional paid-in capital	225,956		232,758
Common Shares held in treasury, 1,453 and 1,625 shares at March 31, 2023 and December 31, 2022, respectively, at cost	(44,717)		(50,366)
Retained earnings	194,306		201,692
Accumulated other comprehensive loss	(99,302)		(103,142)
Total shareholders' equity	276,243		280,942
Total liabilities and shareholders' equity	$	670,738	$	652,105

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

STONERIDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended March 31,
(in thousands, except per share data)	2023		2022
Net sales	$	241,325	$	221,058
Costs and expenses:
Cost of goods sold	198,523		179,615
Selling, general and administrative	29,863		27,399
Design and development	16,968		17,028
Operating loss	(4,029)		(2,984)
Interest expense, net	2,746		1,786
Equity in loss of investee	171		81
Other expense, net	1,148		1,331
Loss before income taxes	(8,094)		(6,182)
(Benefit) provision for income taxes	(708)		1,493
Net loss	$	(7,386)	$	(7,675)
Loss per share:
Basic	$	(0.27)	$	(0.28)
Diluted	$	(0.27)	$	(0.28)
Weighted-average shares outstanding:
Basic	27,349		27,199
Diluted	27,349		27,199

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

STONERIDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three months ended March 31,
(in thousands)	2023		2022
Net loss	$	(7,386)	$	(7,675)
Other comprehensive income (loss), net of tax:
Foreign currency translation (1)	4,072		4,161
Unrealized (loss) gain on derivatives (2)	(232)		1,048
Other comprehensive income, net of tax	3,840		5,209
Comprehensive loss	$	(3,546)	$	(2,466)

(1)  Net of tax expense of $144 for the three months ended March 31, 2022.

(2) Net of tax (benefit) expense of $(62) and $279 for the three months ended March 31, 2023 and 2022, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

STONERIDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three months ended March 31, (in thousands)	2023		2022
OPERATING ACTIVITIES:
Net loss	$	(7,386)	$	(7,675)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation	6,573		6,877
Amortization, including accretion and write-off of deferred financing costs	1,946		2,357
Deferred income taxes	(2,536)		(605)
Loss of equity method investee	171		81
Gain on sale of fixed assets	(886)		(94)
Share-based compensation expense	69		1,098
Excess tax deficiency related to share-based compensation expense	34		265
Changes in operating assets and liabilities:
Accounts receivable, net	(16,833)		(6,129)
Inventories, net	(15,228)		(9,812)
Prepaid expenses and other assets	1,943		(12,842)
Accounts payable	21,264		6,581
Accrued expenses and other liabilities	1,687		87
Net cash used for operating activities	(9,182)		(19,811)
INVESTING ACTIVITIES:
Capital expenditures, including intangibles	(10,110)		(7,368)
Proceeds from sale of fixed assets	1,355		132
Net cash used for investing activities	(8,755)		(7,236)
FINANCING ACTIVITIES:
Revolving credit facility borrowings	8,000		—
Revolving credit facility payments	(8,568)		(16,000)
Proceeds from issuance of debt	8,148		9,834
Repayments of debt	(8,475)		(10,311)
Repurchase of Common Shares to satisfy employee tax withholding	(1,224)		(669)
Net cash used for financing activities	(2,119)		(17,146)
Effect of exchange rate changes on cash and cash equivalents	423		34
Net change in cash and cash equivalents	(19,633)		(44,159)
Cash and cash equivalents at beginning of period	54,798		85,547
Cash and cash equivalents at end of period	$	35,165	$	41,388
Supplemental disclosure of cash flow information:
Cash paid for interest, net	$	2,494	$	1,435
Cash paid for income taxes, net	$	2,611	$	1,491

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

STONERIDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(in thousands)	Number of Common Shares outstanding	Number of  treasury shares	Additional paid-in capital		Common Shares held in treasury		Retained earnings		Accumulated other comprehensive loss		Total shareholders' equity
BALANCE DECEMBER 31, 2021	27,191	1,775	$	232,490	$	(55,264)	$	215,748	$	(97,024)	$	295,950
Net loss	—	—	—		—		(7,675)		—		(7,675)
Unrealized gain on derivatives, net	—	—	—		—		—		1,048		1,048
Currency translation adjustments	—	—	—		—		—		4,161		4,161
Issuance of Common Shares	161	(161)	—		—		—		—		—
Repurchased Common Shares for treasury, net	(36)	36	—		4,093		—		—		4,093
Share-based compensation, net	—	—	(3,653)		—		—		—		(3,653)
BALANCE MARCH 31, 2022	27,316	1,650	$	228,837	$	(51,171)	$	208,073	$	(91,815)	$	293,924
BALANCE DECEMBER 31, 2022	27,341	1,625	232,758		(50,366)		201,692		(103,142)		280,942
Net loss	—	—	—		—		(7,386)		—		(7,386)
Unrealized loss on derivatives, net	—	—	—		—		—		(232)		(232)
Currency translation adjustments	—	—	—		—		—		4,072		4,072
Issuance of Common Shares	234	(234)	—		—		—		—		—
Repurchased Common Shares for treasury, net	(62)	62	—		5,649		—		—		5,649
Share-based compensation, net	—	—	(6,802)		—		—		—		(6,802)
BALANCE MARCH 31, 2023	27,513	1,453	$	225,956	$	(44,717)	$	194,306	$	(99,302)	$	276,243

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2022 Form 10-K.

Reclassifications

Certain prior period amounts have been reclassified to conform to their 2023 presentation in the condensed consolidated financial statements.

(2) Recently Issued Accounting Standards

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”). The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met. The guidance will also allow companies to elect various optional expedients, which would allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2023. As of March 31, 2023, the Company has not yet had contracts modified due to rate reform.

(3) Revenue

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Incidental items that are not significant in the context of the contract are recognized as expense. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold. Customer returns only occur if products do not meet the specifications of the contract and are not connected to any repurchase obligations of the Company.

The Company does not have any financing components or significant payment terms as payment occurs shortly after the point of sale. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of operations. Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales.

Revenue by Reportable Segment

Control Devices. Our Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle. This segment includes product lines such as actuators, sensors, switches and connectors. We sell these products principally to the automotive market in the North American and Asia Pacific regions. To a lesser extent, we also sell these products to the commercial vehicle and agricultural markets in the North American and Asia

9

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Pacific regions. Our customers included in these markets primarily consist of original equipment manufacturers (“OEM”) and companies supplying components directly to the OEMs (“Tier 1 supplier”).

Electronics. Our Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products and electronic control units. These products are sold principally to the commercial vehicle market primarily through our OEM and aftermarket channels in the European, North American and Asia Pacific regions. The vision and safety systems are sold principally to the commercial vehicle and off-highway vehicle markets in the European and North American regions.

Stoneridge Brazil. Our Stoneridge Brazil segment primarily serves the South American region and specializes in the design, manufacture and sale of vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions. Stoneridge Brazil sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services, directly to OEMs and through mass merchandisers. In addition, monitoring services and tracking devices are sold directly to corporate customers and individual consumers.

The following tables disaggregate our revenue by reportable segment and geographical location(1) for the three months ended March 31, 2023 and 2022:

	Control Devices				Electronics				Stoneridge Brazil				Consolidated
Three months ended March 31,	2023		2022		2023		2022		2023		2022		2023		2022
Net Sales:
North America	$	75,681	$	71,490	$	48,045	$	32,338	$	—	$	—	$	123,726	$	103,828
South America	—		—		—		—		14,256		12,045		14,256		12,045
Europe	—		—		87,246		91,785		—		—		87,246		91,785
Asia Pacific	10,261		12,570		5,836		830		—		—		16,097		13,400
Total net sales	$	85,942	$	84,060	$	141,127	$	124,953	$	14,256	$	12,045	$	241,325	$	221,058

___________________________

(1)Company sales based on geographic location are where the sale originates not where the customer is located.

Performance Obligations

For OEM and Tier 1 supplier customers, the Company typically enters into contracts to provide serial production parts that consist of a set of documents including, but not limited to, an award letter, master purchase agreement and master terms and conditions. For each production product, the Company enters into separate purchase orders that contain the product specifications and an agreed-upon price. The performance obligation does not exist until a customer release is received for a specific number of parts. The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of camera monitoring systems (“CMS”) sold through our aftermarket channel that are common across all customers. The transaction price is equal to the contracted price per part and there is no expectation of material variable consideration in the transaction price. For most customer contracts, the Company does not have an enforceable right to payment at any time prior to when the parts are shipped or delivered to the customer; therefore, the Company recognizes revenue at the point in time it satisfies a performance obligation by transferring control of a part to the customer. Certain customer contracts contain an enforceable right to payment if the customer terminates the contract for convenience and therefore are recognized over time using the cost to complete input method.

Our aftermarket products are focused on meeting the demand for repair and replacement parts, compliance parts and accessories and are sold primarily to aftermarket distributors and mass retailers in our South American, European and North American markets. Aftermarket products have one type of performance obligation which is the delivery of aftermarket parts and spare parts. For aftermarket customers, the Company typically has standard terms and conditions for all customers. In addition, aftermarket products have alternative use as they can be sold to multiple customers. Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfers to the customer which is based on the shipping terms. Aftermarket contracts may include variable consideration related to discounts and rebates which is included in the transaction price upon recognizing the product revenue.

A small portion of the Company’s sales are comprised of monitoring services that include both monitoring devices and fees to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment. These monitoring service contracts are

10

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

generally not capable of being distinct and are accounted for as a single performance obligation. We recognize revenue for our monitoring products and services contracts over the life of the contract. There is no variable consideration associated with these contracts. The Company has the right to consideration from a customer in the amount that corresponds directly with the value to the customer of the Company’s performance to date. Therefore, the Company recognizes revenue over time using the practical expedient ASC 606-10-55-18 in the amount the Company has a “right to invoice” rather than selecting an output or input method.

Contract Balances

The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of March 31, 2023 and December 31, 2022.

(4) Inventories

Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following:

	March 31, 2023		December 31, 2022
Raw materials	$	132,302	$	121,983
Work-in-progress	9,414		7,812
Finished goods	26,985		22,785
Total inventories, net	$	168,701	$	152,580

Inventory valued using the FIFO method was $154,203 and $139,996 at March 31, 2023 and December 31, 2022, respectively. Inventory valued using the average cost method was $14,498 and $12,584 at March 31, 2023 and December 31, 2022, respectively.

(5) Financial Instruments and Fair Value Measurements

Financial Instruments

A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt, due to the variable interest rate on the Credit Facility and the maturity of the remaining outstanding debt.

Derivative Instruments and Hedging Activities

On March 31, 2023, the Company had no open foreign currency forward contracts. The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2022. Management believes that its use of these instruments to reduce risk is in the Company’s best interest. The counterparties to these financial instruments have been financial institutions with investment grade credit ratings.

Foreign Currency Exchange Rate Risk

The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk. The Company uses derivative financial instruments as cash flow hedges and used net investment hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.

11

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Net Investment Hedges

During 2021, the Company entered into two cross-currency swaps, designated as net investment hedges, with notional values of $25,000 each that were scheduled to mature in August 2026 and August 2028. These swaps hedged a portion of the net investment in a certain euro-denominated subsidiary.

The Company elected to assess hedge effectiveness of the net investment hedges under the spot method. Accordingly, periodic changes in the fair value of the derivative instruments attributable to factors other than spot exchange rate variability were excluded from the measurement of hedge ineffectiveness and reported directly in earnings each reporting period. The change in fair value of these derivative instruments was recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. The Company had no outstanding net investment hedges at March 31, 2023 or December 31, 2022.

Cash Flow Hedges

The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2022. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive loss fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions was measured using regression analysis and forecasted future purchases of the currency.

In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s condensed consolidated statements of operations as a component of other expense, net. During 2022, all of the Company’s foreign currency forward contracts were designated as cash flow hedges.

The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:

Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges

The Company held Mexican peso-denominated foreign currency forward contracts that expired ratably on a monthly basis from January 2022 to December 2022. The notional amount at December 31, 2022 related to Mexican peso-denominated foreign currency forward contracts was $0.

Interest Rate Risk

Interest Rate Risk – Cash Flow Hedge

On February 18, 2020, the Company entered into a floating-to-fixed interest rate swap agreement (the “Interest Rate Swap”) with a notional amount of $50,000 to hedge its exposure to interest payment fluctuations on a portion of its Credit Facility borrowings. The Interest Rate Swap matured on March 10, 2023. The Interest Rate Swap was designated as a cash flow hedge of the variable interest rate obligation under the Company's Credit Facility that has a current balance of $167,393 at March 31, 2023. Accordingly, the change in fair value of the Interest Rate Swap was recognized in accumulated other comprehensive loss. The Interest Rate Swap agreement required monthly settlements on the same days that the Credit Facility interest payments are due and had a maturity date of March 10, 2023, which was prior to the Credit Facility maturity date of June 4, 2024. Under the Interest Rate Swap terms, the Company paid a fixed interest rate and received a floating interest rate based on the one-month LIBOR, with a floor. The critical terms of the Interest Rate Swap were aligned with the terms of the Credit Facility, resulting in no hedge ineffectiveness. The difference between amounts to be received and paid under the Interest Rate Swap were recognized as a component of interest expense, net on the condensed consolidated statements of operations. The Interest Rate Swap settlements reduced interest expense, net by $290 and increased interest expense, net by $153 for the three months ended March 31, 2023 and 2022, respectively.

12

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:

	Notional amounts (A)				Prepaid expenses  and other current assets
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Derivatives designated as hedging instruments:
Cash flow hedges:
Forward currency contracts	$	—	$	—	$	—	$	—
Interest rate swap	$	—	$	50,000	$	—	$	294
Net investment hedges:
Cross-currency swaps	$	—	$	—	$	—	$	—

_____________________________

(A)Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars.

Gross amounts recorded for the cash flow and net investment hedges in other comprehensive income and in net loss for the three months ended March 31 were as follows:

	Gain (loss) recorded in other comprehensive income				Gain (loss) reclassified from other comprehensive income into net loss (A)
	2023		2022		2023		2022
Derivatives designated as cash flow hedges:
Forward currency contracts	$	—	$	915	$	—	$	251
Interest rate swap	$	(4)	$	510	$	290	$	(153)
Derivatives designated as net investment hedges:
Cross-currency swaps	$	—	$	687	$	—	$	—

_____________________________

(A) Gains reclassified from other comprehensive income into net loss recognized in selling, general and administrative expenses (“SG&A”) in the Company’s condensed consolidated statements of operations were $0 and $51 for the three months ended March 31, 2023 and 2022, respectively. Gains reclassified from other comprehensive income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $0 and $199 for the three months ended March 31, 2023 and 2022, respectively. Gains (losses) reclassified from other comprehensive income into net loss recognized in interest expense, net in the Company’s condensed consolidated statements of operations were $290 and $(153) for the three months ended March 31, 2023 and 2022, respectively.

Cash flows from derivatives used to manage foreign currency exchange and interest rate risks are classified as operating activities within the condensed consolidated statements of cash flows.

Fair Value Measurements

Certain assets and liabilities held by the Company are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward currency and cross-currency contracts, inputs include forward foreign currency exchange rates. For the interest rate swap, inputs include LIBOR. Fair values estimated using Level 3 inputs consist of significant unobservable inputs.

13

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used.

			March 31, 2023						December 31, 2022
			Fair values estimated using
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs		Fair value
Financial assets carried at fair value:
Interest rate swap	—		—		—		—		294
Total financial assets carried at fair value	$	—	$	—	$	—	$	—	$	294

The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.

	Stoneridge Brazil
		2022
Balance at January 1		$	7,351
Foreign currency adjustments		1,308
Balance at March 31		$	8,659

The Company was required to pay the Stoneridge Brazil earn-out consideration based on Stoneridge Brazil’s financial performance in 2021. The fair value of the Stoneridge Brazil earn-out consideration was based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) in 2021. The Stoneridge Brazil earn-out consideration obligation was recorded within accrued expenses and other current liabilities in the condensed consolidated balance sheets as of December 31, 2021. The earn-out consideration obligation of $8,272 was paid in April 2022 and recorded in the condensed consolidated statement of cash flows within operating and financing activities in the amounts of $1,996 and $6,276, respectively.

The foreign currency impact related to the Stoneridge Brazil earn-out consideration was included in other expense, net in the condensed consolidated statements of operations.

There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the three months ended March 31, 2023.

(6) Share-Based Compensation

Compensation expense for share-based compensation arrangements, which is recognized in the condensed consolidated statements of operations as a component of SG&A expenses, was $69 and $1,098 for the three months ended March 31, 2023 and 2022, respectively. The three months ended March 31, 2023 included income from the forfeiture of certain grants associated with employee resignations.

14

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(7) Debt

Debt consisted of the following at March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022		Interest rates at March 31, 2023		Maturity
Revolving Credit Facility
Credit Facility	$	167,393	$	167,802	7.16	%	June 2024
Debt
Sweden short-term credit line	—		—
Suzhou short-term credit line	1,456		1,450		3.70%		June 2023
Total debt	1,456		1,450
Less: current portion	(1,456)		(1,450)
Total long-term debt, net	$	—	$	—

Revolving Credit Facility

On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility provided for a $400,000 senior secured revolving credit facility (which, as described below in the discussion of Amendment No. 3 to the Credit Facility was amended to be a $300,000 credit commitment) and it replaced and superseded the Third Amended and Restated Credit Agreement that provided for a $300,000 revolving credit facility. The Credit Facility had an accordion feature that allowed the Company to increase the availability by up to $150,000 upon the satisfaction of certain conditions and includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility. The Credit Facility has a termination date of June 5, 2024. Borrowings under the Credit Facility bear interest at either the Base Rate or the LIBOR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio.

The Credit Facility contains customary affirmative covenants and representations. The Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries. The Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $30,000, (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $30,000, (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.

Due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions on the Company’s end-markets and the resulting financial impacts on the Company, on February 28, 2022, the Company entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 reduced the total revolving credit commitments from $400.0 million to $300.0 million and the maximum permitted amount of swing loans from $40.0 million to $30.0 million. Amendment No. 3 provides for certain financial covenant relief and additional covenant restrictions during the “Specified Period” (the period from February 28, 2022 until the date that the Company delivers a compliance certificate for the quarter ending March 31, 2023 in form and substance satisfactory to the administrative agent). During the Specified Period:

•the maximum net leverage ratio was changed to 4.00 to 1.00 for the year ended December 31, 2021, suspended for the quarters ending March 31, 2022 through September 30, 2022 and could not exceed 4.75 to 1.00 for the quarter ended December 31, 2022 or 3.50 to 1.00 for the quarter ended March 31, 2023;

15

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

•the minimum interest coverage ratio of 3.50 was reduced to 2.50 for the quarter ended March 31, 2022, 2.25 for the quarter ended June 30, 2022 and 3.00 for the quarters ended September 30, 2022 and December 31, 2022;

•an additional condition to drawing on the Credit Facility has been added that restricts borrowings if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there are certain additional restrictions on Restricted Payments (as defined); and

•a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Specified Period.

Amendment No. 3 changed the leverage based LIBOR pricing grid through the maturity date and also retained a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain subject to a LIBOR floor of 0 basis points.

Amendment No. 3 also incorporated hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.

The Company capitalized $484 of deferred financing costs as a result of entering into Amendment No. 3. In connection with Amendment No. 3, the Company wrote off a portion of the previously recorded deferred financing costs of $365 in interest expense, net during the year ended December 31, 2022.

Due to continued supply chain disruptions and macroeconomic challenges on the Company’s end-markets and the resulting financial impacts on the Company, on March 1, 2023, the Company entered into Amendment No. 4 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 4”). Amendment No. 4 provides for certain financial covenant relief and additional covenant restrictions during the “Amendment No. 4 Specified Period” (the period from March 1, 2023 until the date that the Company delivers a compliance certificate for the quarter ending September 30, 2023 in form and substance satisfactory to the administrative agent). During the Amendment No. 4 Specified Period:

•the maximum net leverage ratio was changed to 4.75 to 1.00 for the quarter ended March 31, 2023 and 4.25 to 1.00 for the quarter ended June 30, 2023;

•the minimum interest coverage ratio of 3.50 was reduced to 3.00 for the quarters ended March 31, 2023 and June 30, 2023;

•drawing on the Credit Facility continues to be restricted if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there continue to be certain additional restrictions on Restricted Payments (as defined); and

•consistent with Amendment No. 3, a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Amendment No. 4 Specified Period.

The Company capitalized $332 of deferred financing costs as a result of entering into Amendment No. 4.

Borrowings outstanding on the Credit Facility were $167,393 and $167,802 at March 31, 2023 and December 31, 2022, respectively.

As a result of the amendments, the Company was in compliance with all Credit Facility covenants at March 31, 2023 and December 31, 2022.

The Company also has outstanding letters of credit of $1,626 at both March 31, 2023 and December 31, 2022.

Debt

The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $1,928 and $1,922, at March 31, 2023 and December 31, 2022, respectively. At March 31, 2023 and December 31, 2022, there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2023, the subsidiary borrowed and repaid 85,054 Swedish krona, or $8,197.

The Company’s wholly owned subsidiary located in Suzhou, China (the “Suzhou subsidiary”), has lines of credit (the “Suzhou credit line”) that allow up to a maximum borrowing level of 20,000 Chinese yuan, or $2,912 and $2,900 at March 31, 2023 and December 31, 2022, respectively. At March 31, 2023 and December 31, 2022, there was $1,456 and $1,450, respectively, in borrowings outstanding on the Suzhou credit line with weighted-average interest rates of 3.70% at both March 31, 2023 and December 31, 2022, respectively. The Suzhou credit line is included on the condensed

16

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

consolidated balance sheet within current portion of debt. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms by 180 days. The bank acceptance draft line of credit allows up to a maximum borrowing level of 60,000 Chinese yuan, or $8,737 and $8,699 at March 31, 2023 and December 31, 2022, respectively. There was $4,004 and $1,998 utilized on the Suzhou bank acceptance draft line of credit at March 31, 2023 and December 31, 2022, respectively. The Suzhou bank acceptance draft line of credit is included on the condensed consolidated balance sheet within accounts payable.

(8) Loss Per Share

Basic loss per share was computed by dividing net loss by the weighted-average number of Common Shares outstanding for each respective period. Diluted loss per share was calculated by dividing net income by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. However, for all periods in which the Company recognized a net loss, the Company did not recognize the effect of the potential dilutive securities as their inclusion would be anti-dilutive. Potential dilutive shares of 292,860 and 218,727 for the three months ended March 31, 2023 and 2022, respectively, were excluded from diluted loss per share because the effect would be anti-dilutive.

Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows:

	Three months ended March 31,
	2023	2022
Basic weighted-average Common Shares outstanding	27,349,357	27,198,677
Effect of dilutive shares	—	—
Diluted weighted-average Common Shares outstanding	27,349,357	27,198,677

There were 521,304 and 797,873 performance-based right to receive Common Shares outstanding at March 31, 2023 and 2022, respectively. The right to receive Common Shares are included in the computation of diluted earnings per share based on the number of Common Shares that would be issuable if the end of the quarter were the end of the contingency period.

(9) Accumulated Other Comprehensive (Loss) Income

Changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022 were as follows:

	Foreign currency translation		Unrealized gain (loss) on derivatives		Total
Balance at January 1, 2023	$	(103,374)	$	232	$	(103,142)
Other comprehensive income (loss) before reclassifications	4,072		(3)		4,069
Amounts reclassified from accumulated other comprehensive loss	—		(229)		(229)
Net other comprehensive income (loss), net of tax	4,072		(232)		3,840
Balance at March 31, 2023	$	(99,302)	$	—	$	(99,302)
Balance at January 1, 2022	$	(97,203)	$	179	$	(97,024)
Other comprehensive income before reclassifications	4,161		1,126		5,287
Amounts reclassified from accumulated other comprehensive loss	—		(78)		(78)
Net other comprehensive income, net of tax	4,161		1,048		5,209
Balance at March 31, 2022	$	(93,042)	$	1,227	$	(91,815)

(10) Commitments and Contingencies

From time to time, we are subject to various legal actions and claims incidental to our business, including those arising out of breach of contracts, product warranties, product liability, patent infringement, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably

17

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position.

As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site. The Company engaged an environmental engineering consultant to assess the level of contamination and to develop a remediation and monitoring plan for the site. Soil remediation at the site was completed during the year ended December 31, 2010. A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015. During the three months ended March 31, 2023 and 2022, the Company recognized expense of $125 and $0 respectively, related to groundwater remediation. At March 31, 2023 and December 31, 2022, the Company accrued $278 and $246, respectively, related to expected future remediation costs. At March 31, 2023 and December 31, 2022, $271 and $132, respectively, were recorded as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets while the remaining amounts as of March 31, 2023 and December 31, 2022 were recorded as a component of other long-term liabilities. Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring. The recorded liability is based on assumptions in the remedial action plan as well as estimates for future remediation activities. Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company. Due to the ongoing site remediation, the Company is currently required to maintain a $1,489 letter of credit for the benefit of the buyer.

The Company’s Stoneridge Brazil subsidiary has civil, labor and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company’s legal advisors in Brazil. As a result, no provision has been recorded with respect to these contingencies, which amounted to R$47,898 ($9,428) and R$47,820 ($9,165) at March 31, 2023 and December 31, 2022, respectively. An unfavorable outcome on these contingencies could result in significant cost to the Company and adversely affect its results of operations.

On August 12, 2020, the Brazilian Administrative Counsel for Economic Defense (“CADE”) issued a ruling against Stoneridge Brazil for abuse of dominance and market foreclosure through its prior use of exclusivity provisions in agreements with its distributors. The CADE tribunal imposed a R$7,995 ($1,574) fine which is included in the reasonably possible contingencies noted above. The Company is challenging this ruling in Brazilian federal court to reverse this decision by the CADE tribunal.

Product Warranty and Recall

Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims, forecasts of the resolution of existing claims, expected future claims on products sold and commercial discussions with our customers. The key factors in our estimate are the warranty period and the customer source. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Product warranty and recall reserve included $4,979 and $4,437 of a long-term liability at March 31, 2023 and December 31, 2022, respectively, which is included as a component of other long-term liabilities on the condensed consolidated balance sheets.

The following provides a reconciliation of changes in product warranty and recall reserve liability:

Three months ended March 31,	2023		2022
Product warranty and recall reserve at beginning of period	$	13,477	$	9,846
Accruals for warranties established during period	4,329		3,058
Aggregate changes in pre-existing liabilities due to claim developments	141		—
Settlements made during the period	(2,025)		(2,992)
Foreign currency translation	66		(94)
Product warranty and recall reserve at end of period	$	15,988	$	9,818

18

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(11) Business Realignment and Restructuring

On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line. The decision to exit the PM sensor product line was made after consideration of the decline in the market outlook for diesel passenger vehicles, the current and expected profitability of the product line and the Company’s strategic focus on aligning resources with the greatest opportunities. In conjunction with the strategic exit of the PM sensor product line, the Company entered into an asset purchase agreement related to the sale of the PM sensor product line during the first quarter of 2021.

The only remaining costs relate to potential commercial settlements and legal fees which we continue to negotiate. The estimated range of additional cost related to these settlements and fees is up to $4,200.

The settlement of liabilities associated with the exit of the PM sensor line that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	35		—		(35)		—		—
Total	$	35	$	—	$	(35)	$	—	$	—

On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”). The costs for the Canton Restructuring included employee severance and termination costs, contract terminations costs, professional fees and other related costs such as moving and set-up costs for equipment and costs to restore the engineering function previously located at the Canton facility. We do not expect to incur additional costs related to the Canton Restructuring.

The settlement of liabilities associated with for the Canton Restructuring that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	$	93	$	—	$	(93)	$	—	$	—
Total	$	93	$	—	$	(93)	$	—	$	—

In addition to specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs that are referred to as business realignment charges.

Business realignment charges incurred by reportable segment were as follows:

	Three months ended March 31,
	2023		2022
Electronics (A)	309		—
Stoneridge Brazil (B)	—		34
Unallocated Corporate (C)	953		—
Total business realignment charges	$	1,262	$	34

_____________________________________

(A) Severance costs for the three months ended March 31, 2023 related to COGS and SG&A were $175 and $134, respectively.

19

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

(B) Severance costs for the three months ended March 31, 2022 related to SG&A were $34.

(C) Employee separation related costs for the three months ended March 31, 2023 related to SG&A were $953.

Business realignment charges incurred, classified by statement of operations line item were as follows:

	Three months ended March 31,
	2023		2022
Cost of goods sold	$	175	$	—
Selling, general and administrative	1,087		34
Total business realignment charges	$	1,262	$	34

(12) Income Taxes

For interim tax reporting, we estimate our annual effective tax rate and apply it to our year to date ordinary income. Tax jurisdictions with a projected or year to date loss for which a benefit cannot be realized are excluded.

For the three months ended March 31, 2023, income tax benefit of $708 was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of 8.7% varies from the statutory rate primarily due to U.S. taxes on foreign earnings and non-deductible expenses offset by the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions and tax credits and incentives.

For the three months ended March 31, 2022, income tax expense of $1,493 was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of (24.2)% varies from the statutory rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions as well as U.S. tax on foreign earnings offset by tax credits and incentives.

(13) Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer.

The Company has three reportable segments, Control Devices, Electronics and Stoneridge Brazil, which also represent its operating segments. The Control Devices reportable segment produces actuators, sensors, switches and connectors. The Electronics reportable segment produces driver information systems, vision and safety systems, connectivity and compliance products and electronic control units. The Stoneridge Brazil reportable segment designs and manufactures vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions.

The accounting policies of the Company’s reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies” of the Company’s 2022 Form 10-K. The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, capital expenditures and operating income. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.

The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Corporate costs include various support functions, such as accounting/finance, executive administration, human resources, information technology and legal.

20

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

A summary of financial information by reportable segment is as follows:

Three months ended March 31,	2023		2022
Net Sales:
Control Devices	$	85,942	$	84,060
Inter-segment sales	734		930
Control Devices net sales	86,676		84,990
Electronics	141,127		124,953
Inter-segment sales	8,516		7,711
Electronics net sales	149,643		132,664
Stoneridge Brazil	14,256		12,045
Inter-segment sales	—		—
Stoneridge Brazil net sales	14,256		12,045
Eliminations	(9,250)		(8,641)
Total net sales	$	241,325	$	221,058
Operating (Loss) Income:
Control Devices	$	2,087	$	6,776
Electronics	1,400		(2,712)
Stoneridge Brazil	1,343		492
Unallocated Corporate (A)	(8,859)		(7,540)
Total operating loss	$	(4,029)	$	(2,984)
Depreciation and Amortization:
Control Devices	$	3,174	$	3,561
Electronics	3,464		3,593
Stoneridge Brazil	1,085		991
Unallocated Corporate	602		561
Total depreciation and amortization (B)	$	8,325	$	8,706
Interest Expense (Income), net:
Control Devices	$	18	$	25
Electronics	485		73
Stoneridge Brazil	(270)		(158)
Unallocated Corporate	2,513		1,846
Total interest expense, net	$	2,746	$	1,786
Capital Expenditures:
Control Devices	$	1,956	$	3,845
Electronics	6,207		2,833
Stoneridge Brazil	636		669
Unallocated Corporate(C)	112		21
Total capital expenditures	$	8,911	$	7,368

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STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

	March 31, 2023		December 31, 2022
Total Assets:
Control Devices	$	177,154	$	174,535
Electronics	380,666		369,232
Stoneridge Brazil	64,128		60,861
Corporate (C)	421,554		419,469
Eliminations	(372,764)		(371,992)
Total assets	$	670,738	$	652,105

The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates:

Three months ended March 31,	2023		2022
Net Sales:
North America	$	123,726	$	103,828
South America	14,256		12,045
Europe and Other	103,343		105,185
Total net sales	$	241,325	$	221,058

	March 31, 2023		December 31, 2022
Long-term Assets:
North America	$	94,451	$	92,149
South America	32,471		31,796
Europe and Other	120,680		118,609
Total long-term assets	$	247,602	$	242,554

__________________________________________________________

(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.

(B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.

(C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries.

(14) Investments

PST Eletrônica Ltda.

The Company had a 74% controlling interest in Stoneridge Brazil from December 31, 2011 through May 15, 2017. On May 16, 2017, the Company acquired the remaining 26% noncontrolling interest in Stoneridge Brazil. As part of the acquisition agreement, the Company was required to pay additional earn-out consideration based on Stoneridge Brazil’s financial performance in 2021. The final earn-out consideration of $8,272 was paid on April 29, 2022. See Note 5 for the fair value and foreign currency adjustments of the earn-out consideration in prior periods.

Other Investments

In December 2018, the Company entered into an agreement to make a $10,000 investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology which is accounted for under the equity method of accounting. The Company’s $10,000 investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company did not contribute to or receive distributions from

22

STONERIDGE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data, unless otherwise stated)

(Unaudited)

Autotech Fund II during the three months ended March 31, 2023 or 2022. The Company has a 6.5% interest in Autotech Fund II. The Company recognized losses of $171 and $81 during the three months ended March 31, 2023 and 2022, respectively. The Autotech Fund II investment recorded in investments and other long-term assets in the condensed consolidated balance sheets was $8,473 and $8,644 as of March 31, 2023 and December 31, 2022, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a global designer and manufacturer of highly engineered electrical and electronic systems, components and modules primarily for the automotive, commercial, off-highway and agricultural vehicle markets.

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes related thereto and other financial information included elsewhere herein.

Segments

We are organized by products produced and markets served. Under this structure, our operations have been reported using the following segments:

Control Devices. This segment includes results of operations that manufacture actuators, sensors, switches and connectors.

Electronics. This segment includes results of operations from the production of driver information systems, vision and safety systems, connectivity and compliance products and electronic control units.

Stoneridge Brazil. This segment includes results of operations that design and manufacture vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions.

First Quarter Overview

During the first quarter of 2023, we benefited from both increased volumes in our North American and European commercial, and North American automotive markets due to improvements in material availability, customer production schedules and end market demand. We continue to benefit from the negotiated pricing actions previously agreed to with the majority of our customers which continue to offset a portion of the incremental material and supply chain related costs we have continued to incur. The Company continues to work with our customers to preserve gross margin through price increases aligned with current market conditions and is executing on initiatives to reduce supply chain related costs and improve working capital. In the first quarter of 2023, we experienced some moderation of commercial and operational challenges including material availability, material costs and customer production schedules volatility. While these challenges continue, we are focusing on our long-term growth initiatives that we expect will drive profitable growth in 2023 and beyond.

The Company had net loss of $(7.4) million, or $(0.27) per diluted share, for the three months ended March 31, 2023.

Net loss for the quarter ended March 31, 2023 decreased by $0.3 million, or $0.01 per diluted share, from net loss of $(7.7) million, or $(0.28) per diluted share, for the three months ended March 31, 2022. Net loss decreased primarily due to additional contribution from higher sales levels offset by higher business realignment and interest costs. Net sales increased by $20.3 million, or 9.2%, primarily from higher volumes in our served markets offset by lower required electronic component spot buy purchases and adverse foreign currency movements in our Electronics segment. During the first quarter, the overall transportation industry continued to be challenged by on-going supply chain disruptions including electronic component shortages even though these conditions have improved relative to prior quarters.

Our Control Devices segment net sales increased by 2.2% compared to the first quarter of 2022 primarily as a result of higher North American automotive volumes including production ramp-up of new products and negotiated price increases offset by lower China automotive volumes. Segment gross margin decreased due to higher material costs and unfavorable sales mix. Segment operating income decreased due to lower gross margin.

Our Electronics segment net sales increased by 12.9% compared to the first quarter of 2022 primarily due to increased sales volumes in our European commercial and North American commercial vehicle markets including the continued ramp up of previously launched new products offset by lower required electronic component spot buy purchases. Segment gross margin as a percent of sales increased primarily due to higher contribution from higher sales levels and lower required electronic component spot buy purchases offset by an increase in material and labor costs. Operating income for the segment increased compared to the first quarter of 2022 primarily due to higher gross margin.

Our Stoneridge Brazil segment net sales increased by 18.4% compared to the first quarter of 2022 primarily due to higher sales of our OEM products and tracking devices offset by lower sales demand for our other product lines. Segment gross margin increased due to increased contribution margin from higher sales. Operating income increased due to higher gross margin.

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In the first quarter of 2023, SG&A expenses increased by $2.5 million compared to the first quarter of 2022 primarily due to higher current quarter business realignment costs of $1.1 million and 2022 favorable legal settlements offset by a gain on the disposal of fixed assets.

In the first quarter of 2023, D&D costs remained consistent with the prior year first quarter as higher spending was offset by an increase in the capitalization of software development costs.

At March 31, 2023 and December 31, 2022, we had cash and cash equivalents balances of $35.2 million and $54.8 million, respectively, and we had $167.4 million and $167.8 million, respectively, in borrowings outstanding on our Credit Facility. The 2023 decrease in cash and cash equivalents was due to capital expenditures for new product launches and higher working capital from the return to normalized sales and production levels after year end shut downs.

Outlook

The Company believes that focusing on products that address industry megatrends will have a positive effect on both our top-line growth and underlying margins. For example, the Company is aligned with platforms likely to perform well against overall market dynamics including our content on electrified vehicle platforms and our continued focus on safety-based products.

Since the first quarter of 2021, we have been experiencing supply chain related disruptions, due to a worldwide semiconductor shortage, as well as other material availability constraints, which continue and have resulted in longer lead-times, higher costs and delays in procuring other component parts and raw materials. In addition, global inflation has increased significantly since 2021. Rising costs of materials, labor and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may continue to impact, our results. While incremental material costs have started to moderate, we expect material cost inflation to persist throughout 2023 which will continue to put pressure on margins. In order to minimize the impact of these incremental costs, we have taken several actions, including continuing to negotiate price increases and cost recoveries with our customers and implementing supply chain strategies. In addition, we have taken actions to optimize our organizational structure, reduce discretionary spending and improve operating leverage. We will continue to evaluate macroeconomic conditions and expect ongoing discussions with our customers regarding price increases and other cost recovery actions to improve our margin performance. During the first quarter of 2023, we experienced sequential monthly revenue increases supporting our expectations for continued revenue growth in 2023.

Based on IHS Market production forecast, the North American automotive market is expected to increase to 15.1 million units in 2023 from 14.3 million units in 2022 as this market continues to recover from supply chain disruptions and economic headwinds. The Company expects sales volumes in our Control Devices segment to increase from 2022 based on production forecasts and market conditions as well as incremental revenue from high-demand powertrain actuation program launches. We will continue to focus on growing our core product portfolio aligned with powertrain electrification by investing in our actuation and electrification focused sensor businesses as we anticipate greater opportunities as powertrains become increasingly electrified. However, on-going global supply chain disruptions, including the global semiconductor supply shortage, material and labor cost inflation could adversely impact our sales volumes and gross margin for the remainder of 2023.

For 2023, we expect an increase in our Electronics’ segment sales compared to 2022 primarily due to strong demand for our products in our commercial vehicle end markets and the ramp-up of new product launches even though production volumes in our European and North American commercial markets are expected decrease approximately 2.0% to 3.5%. In addition, we expect increased sales from the continued roll out of our MirrorEye camera-based vision systems including the first OEM launch of our MirrorEye system in North America. Customer recoveries related to spot buys of materials purchased for our customers increased net sales by $58.4 million for the full year 2022 and $9.1 million for the first quarter ended March 31, 2023. Spot buy material purchasing activity, which is recognized as revenue and material costs, was mostly passed through to the customer and was driven by electronic component shortages. The Company expects spot buy activity to moderate but continue in 2023 and cannot predict the duration or magnitude of continued spot buy activity due to volatile supply chains and component availability. We expect to continue to offset a significant majority of spot buy related costs going forward and expect continued reduction in overall spot buy costs in 2023. In addition, we expect customer negotiated price increases to favorably impact sales and mitigate the impact of cost pressure on margin in 2023.

In 2022, our gross D&D spend increased to support near term launches of awarded business in both our Electronics and Control Devices segments. In 2023, we expect that our D&D spending will stabilize as we continue to align our global engineering capabilities in order to develop advanced technologies and systems within our portfolio of products and we expect to sustain current levels of customer reimbursement to support specific programs and products.

Our 2022 Stoneridge Brazil segment revenues decreased compared to the prior year due to lower sales of most of our product lines offset by favorable foreign currency translation and slightly higher sales of tracking devices and monitoring service fees. In October 2022, the International Monetary Fund forecasted the Brazil gross domestic product to grow 2.8% in 2022 and 1.0% in 2023. We expect our served market channels to remain stable in 2023 based on current market

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conditions. Stoneridge Brazil will focus on continuing to grow our OEM capabilities in-region to better support our global customers. This will drive steady future growth and provide a platform to continue to rotate our local portfolio to more closely align with our global business. Our financial performance in our Stoneridge Brazil segment is also subject to uncertainty from movements in the Brazilian Real and Argentina Peso foreign currencies.

As a result of supply chain disruptions and production schedule volatility, our working capital balances, specifically inventory, have increased significantly compared to historical levels. In addition, inventory has also increased from product launches in our Electronics and Control Devices segments. We continue to engage in initiatives to reduce working capital including reducing on-hand inventory by refining our procurement process and managing the on-time collection of our accounts receivable balances.

We expect higher interest expense in 2023 driven by higher benchmark rates on our Credit Facility.

Our future effective tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles and our jurisdictional mix of earnings. We monitor these factors and adjust our effective tax rate accordingly.

Other Matters

A significant portion of our sales are outside of the United States. These sales are generated by our non-U.S. based operations, and therefore, movements in foreign currency exchange rates can have a significant effect on our results of operations, which are presented in U.S. dollars. A significant portion of our raw materials purchased by our Electronics and Stoneridge Brazil segments are denominated in U.S. dollars, and therefore movements in foreign currency exchange rates can also have a significant effect on our results of operations. The U.S. Dollar strengthened against the Mexican peso in 2023 and the euro, Swedish krona and Argentine peso in 2022, unfavorably impacting our reported results.

On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter sensor product line (“PM Sensor Exit”). The costs for the PM Sensor Exit included employee severance and termination costs and other related costs including supplier settlements. Non-cash charges included impairment and accelerated depreciation of fixed assets associated with PM sensor production. We did not recognize any expense as a result of this initiative during the three months ended March 31, 2023 and 2022. The only remaining costs relate to potential commercial settlements and legal fees that we continue to negotiate. The estimated additional cost related to these settlements and fees is up to $4.2 million.

We regularly evaluate the performance of our businesses and their cost structures, including personnel, and make necessary changes thereto in order to optimize our results. We also evaluate the required skill sets of our personnel and periodically make strategic changes. As a consequence of these actions, we incur severance and resignation related costs that we refer to as business realignment charges. Business realignment costs of $1.3 million and less than $0.1 million were incurred during the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Condensed consolidated statements of operations as a percentage of net sales are presented in the following table (in thousands):

Three months ended March 31,	2023				2022				Dollar increase (decrease)
Net sales	$	241,325	100.0	%	$	221,058	100.0	%	$	20,267
Costs and expenses:
Cost of goods sold	198,523		82.3		179,615		81.3		18,908
Selling, general and administrative	29,863		12.4		27,399		12.4		2,464
Design and development	16,968		7.0		17,028		7.7		(60)
Operating loss	(4,029)		(1.7)		(2,984)		(1.3)		(1,045)
Interest expense, net	2,746		1.1		1,786		0.8		960
Equity in loss of investee	171		0.1		81		—		90
Other expense, net	1,148		0.5		1,331		0.6		(183)
Loss before income taxes	(8,094)		(3.4)		(6,182)		(2.8)		(1,912)
(Benefit) provision for income taxes	(708)		(0.3)		1,493		0.7		(2,201)
Net loss	$	(7,386)	(3.1)	%	$	(7,675)	(3.5)	%	$	289

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Net Sales. Net sales for our reportable segments, excluding inter-segment sales, are summarized in the following table (in thousands):

Three months ended March 31,	2023				2022				Dollar increase		Percent increase
Control Devices	$	85,942	35.6	%	$	84,060	38.0	%	$	1,882	2.2	%
Electronics	141,127		58.5		124,953		56.6		16,174		12.9	%
Stoneridge Brazil	14,256		5.9		12,045		5.4		2,211		18.4	%
Total net sales	$	241,325	100.0	%	$	221,058	100.0	%	$	20,267	9.2	%

Our Control Devices segment net sales increased $1.9 million due to an increase in our North American automotive market of $3.7 million and negotiated price increases of $1.2 million offset by a decrease in our China automotive and other markets of $1.4 million and $0.8 million, respectively. In addition, first quarter of 2023 net sales were impacted by an increase in unfavorable foreign currency translation of $0.9 million.

Our Electronics segment net sales increased $16.2 million due to higher sales volumes in our European, North American and China commercial vehicle markets of $26.1 million, $12.3 million and $1.1 million, respectively. These increases were offset by the impact of lower required electronic component spot buy purchases of $13.4 million compared to the first quarter of 2022. In addition, we experienced lower sales volumes in our European off-highway vehicle market of $3.7 million and unfavorable euro and Swedish krona foreign currency translation of $6.6 million compared to the prior year quarter.

Our Stoneridge Brazil segment net sales increased due to higher sales in our OEM products and tracking devices offset by lower sales demand for our other product lines.

Net sales by geographic location are summarized in the following table (in thousands):

Three months ended March 31,	2023				2022				Dollar increase (decrease)		Percent increase (decrease)
North America	$	123,726	51.3	%	$	103,828	47.0	%	$	19,898	19.2	%
South America	14,256		5.9		12,045		5.4		2,211		18.4	%
Europe and Other	103,343		42.8		105,185		47.6		(1,842)		(1.8)	%
Total net sales	$	241,325	100.0	%	$	221,058	100.0	%	$	20,267	9.2	%

The increase in North American net sales was mostly attributable to an increase in sales volume in our commercial vehicle market of $11.7 million and in our automotive market of $3.7 million as well as negotiated price increases and higher required customer recoveries of electronic component spot buys of $1.4 million and $0.8 million, respectively.

The increase in net sales in South America was primarily due to higher sales in our OEM products and tracking devices offset by lower sales demand for our other product lines.

The decrease in net sales in Europe and Other was due to decreases in required customer recoveries of electronic component spot buys and negotiated price increases of $18.2 million and $1.7 million, respectively. In addition, we experienced decreases in our European off-highway and China automotive markets of $3.7 million and $1.4 million, respectively, as well as unfavorable foreign currency translation of $7.5 million. These decreases were offset by increases in our European commercial vehicle market of $26.1 million.

Cost of Goods Sold and Gross Margin. Cost of goods sold increased compared to the first quarter of 2022 and our gross margin decreased from 18.7% in the first quarter of 2022 to 17.7% in the first quarter of 2023. Our material cost as a percentage of net sales increased from 62.3% in the first quarter of 2022 to 62.6% in the first quarter of 2023 from higher material costs resulting from adverse foreign exchange fluctuations and material inflation. Cost of goods sold also increased by $9.1 million, or 3.8% of net sales, and $24.4 million, or 11.0% of sales, for the first quarter of 2023 and 2022, respectively, from the impact of electronic component spot buy purchases, which were offset by customer recoveries. The impact of these spot buy purchases reduced gross margin percent by 0.7%. Overhead as a percentage of net sales was 14.8% and 14.4% for the first quarters of 2023 and 2022, respectively.

Our Control Devices segment gross margin decreased primarily due to higher material costs associated with inflation and an unfavorable sales mix.

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Our Electronics segment gross margin increased due to the contribution from higher sales levels and the reduction of the adverse effect of required electronic component spot buy purchases, net of customer recoveries offset by higher material and labor costs.

Our Stoneridge Brazil segment gross margin increased primarily due to increased contribution from higher sales.

Selling, General and Administrative. SG&A expenses increased by $2.5 million primarily due to higher business realignment costs of $1.1 million. In addition our Control Devices segment recognized 2022 favorable legal settlements offset by a 2023 gain on the sale of fixed assets of an idled sensor production line.

Design and Development. D&D costs were consistent with the prior year first quarter as higher spending was offset by higher capitalized software development costs of $1.2 million in our Electronics segment.

Operating Loss. Operating (loss) income by segment is summarized in the following table (in thousands):

Three months ended March 31,	2023		2022		Dollar increase (decrease)		Percent increase (decrease)
Control Devices	$	2,087	$	6,776	$	(4,689)	(69.2)	%
Electronics	1,400		(2,712)		4,112		151.6
Stoneridge Brazil	1,343		492		851		173.0
Unallocated corporate	(8,859)		(7,540)		(1,319)		(17.5)
Operating loss	$	(4,029)	$	(2,984)	$	(1,045)	(35.0)	%

Our Control Devices segment operating income decreased due to lower gross margin primarily resulting from higher material costs, unfavorable sales mix and a 2022 favorable legal settlement offset by the gain on disposal of fixed assets of $0.8 million.

Our Electronics segment operating income increased primarily due to higher contribution from higher sales offset by higher material and labor as well as adverse foreign exchange fluctuations.

Our Stoneridge Brazil segment operating income increased due to contribution from higher sales levels.

Our unallocated corporate operating loss increased primarily from higher business realignment costs associated with employee separation related costs of $1.0 million.

Operating (loss) income by geographic location is summarized in the following table (in thousands):

Three months ended March 31,	2023		2022		Dollar increase (decrease)		Percent increase (decrease)
North America	$	(6,871)	$	(2,525)	$	(4,346)	(172.1)	%
South America	1,343		492		851		173.0
Europe and Other	1,499		(951)		2,450		257.6
Operating loss	$	(4,029)	$	(2,984)	$	(1,045)	(35.0)	%

Our North American operating loss increased due to higher material and labor costs, higher business realignment costs and a 2022 favorable legal settlement offset by a gain on disposal of fixed assets. Operating income in South America increased due to higher sales levels. Our operating results in Europe and Other increased primarily due to contribution from higher sales levels.

Interest Expense, net. Interest expense, net was $2.7 million and $1.8 million for the three months ended March 31, 2023 and 2022, respectively. The increase for the quarter ended March 31, 2023, was the result of higher benchmark rates affecting the company’s floating rate Credit Facility debt.

Equity in Loss of Investee. Equity loss for Autotech Fund II was $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively.

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Other Expense, net. We record certain foreign currency transaction losses (gains) as a component of other expense, net on the condensed consolidated statement of operations. Other expense, net of $1.1 million decreased by $0.2 million compared to the first quarter of 2022 due to foreign currency transaction losses in Electronics, Control Devices and Stoneridge Brazil segments from the strengthening of the U.S. dollar.

(Benefit) Provision for Income Taxes. For the three months ended March 31, 2023, income tax benefit of $(0.7) million was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of 8.7% varies from the statutory tax rate primarily due to U.S. taxes on foreign earnings and non-deductible expenses offset by the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions and tax credits and incentives.

For the three months ended March 31, 2022, income tax expense of $1.5 million was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of (24.2)% varies from the statutory tax rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions as well as U.S. taxes on foreign earnings offset by tax credits and incentives.

Liquidity and Capital Resources

Summary of Cash Flows:

Three months ended March 31,	2023		2022
Net cash provided by (used for):
Operating activities	$	(9,182)	$	(19,811)
Investing activities	(8,755)		(7,236)
Financing activities	(2,119)		(17,146)
Effect of exchange rate changes on cash and cash equivalents	423		34
Net change in cash and cash equivalents	$	(19,633)	$	(44,159)

Cash used for operating activities decreased compared to 2022 primarily due to a reduction in cash used for assets related to customer recoveries of electronic component spot buys and customer funded tooling. Our receivable terms and collections rates have remained consistent between periods presented. Our inventory levels for both periods presented are elevated compared to historical balances due to a combination of new product launches and supply chain disruptions.

Net cash used for investing activities increased compared to 2022 due to higher capital expenditures and capitalized software development costs slightly offset by increased proceeds from the disposal of fixed assets.

Net cash used for financing activities decreased compared to the prior year first quarter primarily due to higher 2022 net Credit Facility payments.

As outlined in Note 7 to our condensed consolidated financial statements, the Credit Facility permits borrowing up to a maximum level of $300.0 million. This variable rate facility provides the flexibility to refinance other outstanding debt or finance acquisitions through June 2024. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio. The Credit Facility also contains affirmative and negative covenants and events of default that are customary for credit arrangements of this type including covenants that place restrictions and/or limitations on the Company’s ability to borrow money, make capital expenditures and pay dividends. The Credit Facility had an outstanding balance of $167.4 million at March 31, 2023.

Due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions on the Company’s end-markets and the resulting financial impacts on the Company, on February 28, 2022, the Company entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 reduced the total revolving credit commitments from $400.0 million to $300.0 million and the maximum permitted amount of swing loans from $40.0 million to $30.0 million. Amendment No. 3 provides for certain financial covenant relief and additional covenant restrictions during the “Specified Period” (the period from February 28, 2022 until the date that the Company delivers a compliance certificate for the quarter ending March 31, 2023 in form and substance satisfactory to the administrative agent). During the Specified Period:

•the maximum net leverage ratio was changed to 4.00 to 1.00 for the year ended December 31, 2021, suspended for the quarters ending March 31, 2022 through September 30, 2022 and cannot exceed 4.75 to 1.00 for the quarter ended December 31, 2022 or 3.50 to 1.00 for the quarter ended March 31, 2023;

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•the minimum interest coverage ratio of 3.50 was reduced to 2.50 for the quarter ended March 31, 2022, 2.25 for the quarter ended June 30, 2022 and 3.00 for the quarters ended September 30, 2022 and December 31, 2022;

•an additional condition to drawing on the Credit Facility has been added that restricts borrowings if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there are certain additional restrictions on Restricted Payments (as defined); and

•a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Specified Period.

Amendment No. 3 changed the leverage based LIBOR pricing grid through the maturity date and also retained a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remained subject to a LIBOR floor of 0 basis points.

Amendment No. 3 also incorporated hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.

Due to continued supply chain disruptions and macroeconomic challenges on the Company’s end-markets and the resulting financial impacts on the Company, on March 1, 2023, the Company entered into Amendment No. 4 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 4”). Amendment No. 4 provides for certain financial covenant relief and additional covenant restrictions during the “Amendment No. 4 Specified Period” (the period from March 1, 2023 until the date that the Company delivers a compliance certificate for the quarter ending September 30, 2023 in form and substance satisfactory to the administrative agent). During the Amendment No. 4 Specified Period:

•the maximum net leverage ratio was changed to 4.75 to 1.00 for the quarter ended March 31, 2023 and 4.25 to 1.00 for the quarter ended June 30, 2023;

•the minimum interest coverage ratio of 3.50 was reduced to 3.00 for the quarters ended March 31, 2023 and June 30, 2023;

•drawing on the Credit Facility continues to be restricted if the Company's total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there continue to be certain additional restrictions on Restricted Payments (as defined); and

•consistent with Amendment No. 3, a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Amendment No. 4 Specified Period.

As a result of the amendments, the Company was in compliance with all covenants at March 31, 2023 and December 31, 2022. The Company has not experienced a violation that would limit the Company’s ability to borrow under the Credit Facility, as amended and does not expect that the covenants under it will restrict the Company’s financing flexibility. However, it is possible that future borrowing flexibility under the Credit Facility may be limited as a result of lower than expected financial performance due to the adverse impact of macroeconomic conditions and supply chain disruptions on the Company’s markets and general global demand. The Company expects to make additional repayments on the Credit Facility when cash exceeds the amount needed for operations and to remain in compliance with all covenants.

The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20.0 million Swedish krona, or $1.9 million at both March 31, 2023 and December 31, 2022. At March 31, 2023 and December 31, 2022 there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2023, the subsidiary borrowed and repaid 85.1 million Swedish krona, or $8.2 million.

The Company’s wholly owned subsidiary located in Suzhou, China, has lines of credit that allow up to a maximum borrowing level of 20.0 million Chinese yuan, or $2.9 million at both March 31, 2023 and December 31, 2022, respectively. At both March 31, 2023 and December 31, 2022 there was $1.5 million in borrowings outstanding on the Suzhou credit line with weighted-average interest rates of 3.70%. The Suzhou credit line is included on the condensed consolidated balance sheet within current portion of debt. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms by 180 days. The bank acceptance draft line of credit allows up to a maximum borrowing level of 60 million Chinese yuan, or $8.7 million at both March 31, 2023 and December 31, 2022. There was $4.0 million and $2.0 million utilized on the Suzhou bank acceptance draft line of credit at March 31, 2023 and December 31, 2022, respectively. The Suzhou bank acceptance draft line of credit is included on the condensed consolidated balance sheet within accounts payable.

On May 19, 2020, the Company committed to the strategic exit of its Control Devices PM sensor product line. The costs for the PM Sensor Exit included employee severance and termination costs, professional fees and other related costs such as potential commercial and supplier settlements. Non-cash charges included impairment of fixed assets and accelerated depreciation associated with PM sensor production. We did not recognized any expense as a result of this initiative during the three months ended March 31, 2023. The only remaining costs relate to potential commercial settlements and legal fees which we continue to negotiate. The estimated additional costs related to these settlements and fees is up to $4.2 million.

30

In December 2018, the Company entered into an agreement to make a $10.0 million investment in Autotech Fund II managed by Autotech, a venture capital firm focused on ground transportation technology. The Company’s $10.0 million investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. As of March 31, 2023, the Company’s cumulative investment in the Autotech Fund II was $8.1 million. The Company did not contribute to or receive distributions from Autotech Fund II during the three months ended March 31, 2023 or 2022.

Our future results could also be adversely affected by unfavorable changes in foreign currency exchange rates. We have significant foreign denominated transaction exposure in certain locations, especially in Brazil, Argentina, Mexico, Sweden, Estonia, the Netherlands, United Kingdom and China. Currently, we do not have any foreign currency forward contracts in place, but have historically entered into foreign currency forward contracts to reduce our exposure related to certain foreign currency fluctuations. See Note 5 to the condensed consolidated financial statements for additional details. Our future results could also be unfavorably affected by increased commodity prices and material cost inflation as these fluctuations impact the cost of our raw material purchases.

At March 31, 2023, we had a cash and cash equivalents balance of approximately $35.2 million, of which 89.0% was held in foreign locations. The Company has approximately $132.6 million of undrawn commitments under the Credit Facility as of March 31, 2023, which results in total undrawn commitments and cash balances of more than $167.8 million. However, it is possible that future borrowing flexibility under our Credit Facility may be limited as a result of our financial performance.

Commitments and Contingencies

See Note 10 to the condensed consolidated financial statements for disclosures of the Company’s commitments and contingencies.

Seasonality

Our Control Devices and Electronics segments are moderately seasonal, impacted by mid-year and year-end shutdowns and the ramp-up of new model production at key customers. In addition, the demand for our Stoneridge Brazil segment consumer products is generally higher in the second half of the year.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies, which include management’s best estimates and judgments, are included in Part II, Item 7, to the consolidated financial statements of the Company’s 2022 Form 10-K. These accounting policies are considered critical as disclosed in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of the Company’s 2022 Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. There have been no material changes in our significant accounting policies or critical accounting estimates during the first quarter of 2023.

Information regarding other significant accounting policies is included in Note 2 to our consolidated financial statements in Item 8 of Part II of the Company’s 2022 Form 10-K.

Inflation and International Presence

By operating internationally, we are affected by foreign currency exchange rates and the economic conditions of certain countries. Furthermore, given the current economic climate and fluctuations in certain commodity prices, we believe that an increase in such items could significantly affect our profitability. See Note 5 to the condensed consolidated financial statements for additional details on the Company’s foreign currency exchange rate and interest rate risks.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously presented within Part II, Item 7A of the Company’s 2022 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of March 31, 2023, an evaluation was performed under the supervision and with the participation of the Company’s management, including the principal executive officer (“PEO”) and principal financial officer (“PFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the PEO and PFO, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2023.

31

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2023 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

32

PART II–OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in certain legal actions and claims primarily arising in the ordinary course of business. We establish accruals for matters which we believe that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, we do not believe that any of the litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations. We are subject to litigation regarding civil, labor, regulatory and other tax contingencies in our Stoneridge Brazil segment for which we believe the likelihood of loss is reasonably possible, but not probable, although these claims might take years to resolve. We are also subject to product liability and product warranty claims. In addition, if any of our products prove to be defective, we may be required to participate in a government-imposed or customer OEM-instituted recall involving such products. There can be no assurance that we will not experience any material losses related to product liability, warranty or recall claims. See additional details of these matters in Note 10 to the condensed consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes with respect to risk factors previously disclosed in the Company’s 2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to repurchases of Common Shares made by us during the three months ended March 31, 2023. There were 61,778 Common Shares delivered to us by employees as payment for withholding taxes due upon vesting of performance share awards and share unit awards.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
1/1/23-1/31/23	4,858	$	23.26	N/A	N/A
2/1/23-2/28/23	—	$	—	N/A	N/A
3/1/23-3/31/23	56,920	$	19.51	N/A	N/A
Total	61,778

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None

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Item 6. Exhibits

Exhibit Number	Exhibit
10.1	Amendment No. 4 to the Fourth Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).
10.2	Consulting Services Agreement, dated January 30, 2023, by and between Stoneridge, Inc. and Jonathan DeGaynor (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 31, 2023).
10.3	Form of Stoneridge, Inc. Directors’ Restricted Shares Plan 2023 Grant Agreement, filed herewith.
10.4	Form of Stoneridge, Inc. Long-Term Incentive Plan 2023 Performance Shares Grant Agreement, filed herewith.
10.5	Form of Stoneridge, Inc. Long-Term Incentive Plan 2023 Restricted Share Units Agreement, filed herewith.
31.1	Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2	Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1	Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2	Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
	101	XBRL Exhibits:
	101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	104	The cover page from our Quarterly Report on Form 10-Q for the period ended March 31, 2023, filed with the Securities and Exchange Commission on May 3, 2023, is formatted in Inline Extensible Business Reporting Language (“iXBRL”)

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STONERIDGE, INC.
Date: May 3, 2023	/s/ James Zizelman
	James Zizelman
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
Date: May 3, 2023	/s/ Matthew R. Horvath
	Matthew R. Horvath
	Chief Financial Officer and Treasurer
	(Principal Financial Officer)

35

EX-10.3

Exhibit 10.3

STONERIDGE, INC.

DIRECTORS’ RESTRICTED SHARES PLAN

2023 GRANT AGREEMENT

Stoneridge, Inc., an Ohio corporation (the “Company”), pursuant to the terms and conditions hereof, hereby grants to ___________ (the “Grantee”) ___________ Common Shares, without par value, of the Company (the “Restricted Shares”).

1.    The Restricted Shares are in all respects subject to the terms, conditions and provisions of this Agreement and the Company’s Directors’ Restricted Shares Plan (the “Plan”).

2.    Until no longer subject to substantial risk of forfeiture (i.e., “vested”), the Restricted Shares may not be sold, transferred, pledged, assigned or otherwise encumbered, whether voluntarily, involuntarily or by operation of law, and, except as set forth below, will be forfeited to the Company if the Grantee’s status as an Eligible Director (as defined in the Plan) terminates prior to March 1, 2024 for a reason other than where the Grantee is not nominated for re-election by the Board of Directors in 2024. The certificate or certificates, which may be in uncertificated form (electronic or book entry) at the Company’s discretion, representing the Restricted Shares may bear a legend evidencing the restrictions contained herein. The Restricted Shares granted hereby shall vest and no longer be subject to a substantial risk of forfeiture on March 1, 2024. Notwithstanding anything to the contrary in this Agreement, the Restricted Shares awarded to the Grantee hereunder shall no longer be subject to a substantial risk of forfeiture and shall immediately vest and a certificate or certificates representing the Restricted Shares shall be delivered to the Grantee or the Grantee’s estate, as the case may be, upon (i) the Grantee’s death or permanent and total disability or (ii) a Change in Control of the Company (as defined in the Plan). For purposes hereof, “permanent and total disability” means that the Grantee is permanently and totally disabled if the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 6 months.

3.    The Restricted Shares will be issued in the name of the Grantee. The Company’s transfer agent and/or share transfer records will show the Grantee as the owner of record of the Restricted Shares. Except as otherwise provided in this Agreement, the Grantee will have all the rights of a shareholder of the Company, including the right to vote and receive dividends. Dividends on the Restricted Shares, if any, paid prior to March 1, 2024, whether cash or in the form of additional Company Common Shares, shall be deferred and subject to forfeiture if the Restricted Shares granted hereby do not vest with the Grantee on March 1, 2024.

4.    The Company or the Company’s agent will hold (either physical or uncertificated form) the Restricted Shares for the period of time that the Restricted Shares are subject to forfeiture (until vested) and the certificate or certificates representing the Restricted Shares will be delivered to the Grantee after the Restricted Shares are no longer subject to substantial risk of forfeiture. Such delivery may take the form of an electronic transfer of the vested Restricted Shares to the Grantee’s brokerage or other financial account.

5.    On any change in the number or kind of outstanding Common Shares of the Company by reason of a recapitalization, merger, consolidation, reorganization, separation,

liquidation, share split, share dividend, combination of shares or any other change in the corporate structure or Common Shares of the Company, the Company, by action of the Company’s Board of Directors (“Board”), is empowered to make such adjustment, if any, in the number and kind of Restricted Shares subject to this Agreement as it considers appropriate for the protection of the Company and of the Grantee.

6.     The Grantee agrees and represents that Restricted Shares are not being acquired with a view to resale or distribution and will not be sold or otherwise transferred by the Grantee except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder and any applicable state securities laws.

7.    The laws of the State of Ohio govern this Agreement, the Plan and the Restricted Shares granted hereunder.

    8.    The granting of the Restricted Shares does not confer any right on the Grantee to continue as a director of the Company.

IN WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by its duly authorized officer as of March 13, 2023.

STONERIDGE, INC.

By    /s/ James Zizelman            

                            James Zizelman

The foregoing is hereby accepted by Grantee.

EX-10.4

Exhibit 10.4

STONERIDGE, INC.

LONG-TERM INCENTIVE PLAN

2023 PERFORMANCE SHARES GRANT AGREEMENT

Stoneridge, Inc., an Ohio corporation (the “Company”), pursuant to the terms and conditions hereof, hereby grants to ___________ (“Grantee”) the right to receive, depending on continued service and Company performance, ___________ Common Shares (the “Award”), without par value, of the Company (the “Performance Shares”), subject to the terms and conditions of this Agreement (the “Agreement”). As set forth below, the grant of the Performance Shares is comprised of four separate mutually exclusive parts: Award I, Award II, Award III and Award IV.

1.    The Performance Shares are in all respects subject to the terms, conditions and provisions of this Agreement and the Company’s 2016 Long-Term Incentive Plan (the “Plan”), as administered by the Compensation Committee of the Board of Directors (the “Committee”). Terms not defined herein are defined in the Plan.

2.    If earned the Share Units will be paid on a one-for-one basis in Company Common Shares. The right to receive the Company Common Shares pursuant to this Agreement will be forfeited to the Company if the Grantee’s employment with the Company is terminated prior to March 2, 2026 except in the case of (i) retirement, (ii) death, (iii) Permanent Disability, (iv) Change in Control or (v) termination without cause, each as provided below. In the event Grantee’s employment with the Company is terminated prior to March 2, 2026 the forfeiture of the right to receive Company Common Shares pursuant to this Agreement pursuant to this Section 2 will occur immediately after such termination of employment.

3.    For the Performance Shares as described in this Agreement, the applicable performance period begins January 1, 2023 and ends December 31, 2025 (“Performance Period").

4.    If the employment of the Grantee is not terminated prior to March 2, 2026 the Performance Shares shall, subject to satisfaction of the performance criteria applicable to Awards II, III and IV, be earned on March 2, 2026 in the amounts set forth below:

    Award I    Time-Based Restricted Stock Units

        Number of Shares That May be Earned        ___________

    Award II     Performance Shares - TSR

    Number of Shares That May be Earned (target)    ___________

Depending on the achievement of the Company’s total shareholder return (“TSR”) (as defined below) as compared to the Peer Group’s TSR for the Company’s fiscal years 2023, 2024, and 2025 (the “Peer Group Performance Period”):

TSR v. Peer Group	Calculation	Payout Range
50th - 100th percentile	SRI percentile x 2.0	100% - 200%
30th - 49th percentile	50% +{2.5 x (SRI percentile-30)}	50% - 99%
< 30th percentile	0%	0%

The Peer Group companies are: Allison Transmission, Altra Industrial Motion, CalAmp, CIRCOR, Columbus McKinnon, Commercial Vehicle Group, Cooper-Standard Holdings, CTS, Curtiss-Wright, Donaldson, Dorman Products, Franklin Electric, Gentex, Gentherm, LCI Industries, Littelfuse, Martinrea International, Methode Electronics, Modine Manufacturing, Rogers, Standard Motor Products, Strattec Security, Superior Industries, Visteon, and Wabash National. The Peer Group shall be subject to modification at the discretion of the Committee from time to time, when events warrant. The performance of the Peer Group companies shall not be weighted based on the size of the respective company.

Relative TSR compares the results of investing in Stoneridge Common Shares versus the stock of other companies in the Peer Group considering both the appreciation and depreciation in share price, plus the reinvestment of dividends distributed during the three-year performance period. Share price is calculated at the beginning and end of the Performance Period using the average closing price for the final 20 business days during the month of December (the December immediately prior to the grant date and the December immediately prior to the vest date).

    Award III        Performance Shares - EPS

Performance on the Earnings Per Share (“EPS”) performance share metric shall be the actual average EPS relative to the budgeted average EPS for the Company’s fiscal years 2023, 2024 and 2025 (the “EPS Performance Period”). Depending on the Company’s performance on the EPS performance share metric, the following shares may be earned:

	Below Threshold	Threshold	Target	Maximum
Results as a % of Target	<70%	70%	100%	130%
% Shares Earned	0%	50%	100%	200%
Actual Shares Earned	0	___________	___________	___________

The 2023 budgeted EPS is $0.00. The 2024 and 2025 budgeted EPS will be communicated via Addenda to this Agreement and incorporated herein by reference, effective upon their respective adoption by the Committee. The average of the budgeted EPS for fiscal years 2023, 2024 and 2025 will constitute the Target EPS for purposes of the 2023 EPS performance share metric.

If the result on the EPS performance share metric is between two data points per the above table, the number of shares earned shall be determined by interpolation between those data points.

The Company’s EPS for any fiscal year in the EPS Performance Period shall mean the Company’s aggregate fully diluted earnings per Common Share for that fiscal year calculated in accordance with generally accepted accounting principles, before extraordinary items, cumulative effects of changes in accounting principles, adjustments for goodwill impairments and the tax effect thereof, if any, as set forth on the audited consolidated financial statements of the Company for that fiscal year; provided, however, the impact of any acquisitions or divestitures that may occur during any fiscal year in the Performance Period be excluded from actual EPS and, at the Committee discretion, actual EPS may be adjusted to account for any significant, unusual or one-time expense or gain items that the Company could not have reasonably been expected to foresee.

    Award IV    Performance Shares - ROIC

1

Performance on the Return on Invested Capital (“ROIC”) performance share metric shall be the actual average ROIC relative to the budgeted average ROIC for the Company’s fiscal years 2023, 2024 and 2025 (the “ROIC Performance Period”). Depending on the Company’s performance on the ROIC performance share metric, the following shares may be earned:

	Below Threshold	Threshold	Target	Maximum
Results as a % of Target	<70%	70%	100%	130%
% Shares Earned	0%	50%	100%	200%
Actual Shares Earned	0	___________	___________	___________

The 2023 budgeted ROIC is 3.84%. The 2024 and 2025 budgeted ROIC will be communicated via Addenda to this Agreement and incorporated herein by reference, effective upon their respective adoption by the Committee. The average of the budgeted ROIC for fiscal years 2023, 2024 and 2025 will constitute the Target ROIC for purposes of the 2023 ROIC performance share metric.

If the result on the ROIC performance share metric is between two data points per the above table, the number of shares earned shall be determined by interpolation between those data points.

Return on Invested Capital	=	Five point (quarter end) average of Total Assets (less Cash and Cash Equivalents, Goodwill, Investments, Other Long Term Assets, LT Assets – Debt Issuance Costs and Deferred Tax Assets – Noncurrent) less Current Liabilities (excluding Current Portion of Long-Term Debt)
		Operating Income plus Equity Earnings in Investee tax effected at a performance (expected) tax rate

Note: Items above may be adjusted for the impact of non-recurring transactions.

5.    If earned, the Performance Shares for the respective Award will be issued in the name of the Grantee. The Company’s transfer agent and/or share transfer records will show the Grantee as the owner of record of the Performance Shares as of the date the Performance Shares are earned.  The certificate or certificates representing the Performance Shares earned may, at the Company’s discretion, be in uncertificated (electronic or book entry) form.

6.    Notwithstanding the foregoing, in addition to earning the Performance Shares as set forth above, the Performance Shares shall be earned upon the occurrence of an event and in the amounts as described below.

Award I shall be earned and not be forfeited in the event of:

a)the Grantee’s retirement, whereby Performance Shares granted with respect to Award I shall be earned on the date of retirement, subject to the following conditions: only a Grantee who (i) is 63 or older on the date of retirement, (ii) has provided written notice to the Committee of the intent to retire at least three (3) months prior to the retirement date, and (iii) has executed prior to retirement a customary one year non-competition agreement shall be permitted to have his or her Performance Shares earned upon retirement.

b)the Grantee’s death or Permanent Disability;

2

c)    a Change in Control and within 24 months following such Change in Control the Grantee’s employment is terminated by the Company other than for Cause; or,

d)    the termination “without cause” of the Grantee’s employment by the Company; provided, however only in proportion to the number of months, including any partial month, elapsed in the Performance Period divided by 36. In the event of termination “without cause”, the number of months considered to have elapsed in the Performance Period will be counted beginning from the Award grant date and end on the date that notice of termination is provided to or by the Grantee, except in situations where a different date is legally required.

Awards II, III and IV shall be earned at Target and not be forfeited in the event of:

a)the Grantee’s retirement, whereby Performance Shares granted with respect to Awards II, III and IV shall be earned on the date of retirement at Target, subject to the following conditions: only a Grantee who (i) is 63 or older on the date of retirement, (ii) has provided written notice to the Committee of the intent to retire at least three (3) months prior to the retirement date, and (iii) has executed prior to retirement a customary one year non-competition agreement shall be permitted to have his or her Performance Shares earned upon retirement.

b)the Grantee’s death or Permanent Disability;

c)a Change in Control and within 24 months following such Change in Control the Grantee’s employment is terminated by the Company other than for Cause (as defined in the Plan); or,

d)the termination “without cause” of the Grantee’s employment by the Company; provided, however only in proportion to the number of months, including any partial month, elapsed in the Performance Period divided by 36. In the event of termination “without cause”, the number of months considered to have elapsed in the Performance Period will be counted beginning from the Award grant date and end on the date that notice of termination is provided to the employee, except in situations where a different date is legally required.

A certificate or certificates representing the earned Performance Shares granted under Awards I, II, III and IV shall be delivered to the Grantee or the Grantee’s estate after the occurrence of an event described above as soon as practical, but in no event shall be delivered later than the 15th day of the third month following the year in which the Performance Shares were earned.

7.    On any change in the number or kind of outstanding common shares of the Company by reason of a recapitalization, merger, consolidation, reorganization, separation, liquidation, share split, share dividend, combination of shares or any other change in the corporate structure or Common Shares of the Company, the Company, by action of the Committee, is empowered to make such adjustment, if any, in the number and kind of Performance Shares subject to this Agreement as it considers appropriate for the protection of the Company and of the Grantee.

8.    No later than the date as of which an amount first becomes includable in the gross income of the Grantee for income tax purposes with respect to the Performance Shares granted hereunder, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any taxes (federal, state, local or other required taxes), or any kind of withholding required by law with respect to that amount. Unless otherwise determined by the Committee, minimum statutory withholding obligations may be settled with Common Shares that have been earned. The making of that payment or those arrangements is a condition to the obligations of the Company under the Plan, and the Company and its subsidiaries and affiliates may, to the extent permitted by law, deduct any taxes from any payment of any kind otherwise payable to the Grantee.

3

9.    Nothing in this Agreement shall affect in any manner any conflicting or other provision of any other agreement between the Grantee and the Company. Nothing contained in this Agreement shall limit whatever right the Company might otherwise have to terminate the employment of the Grantee.

10.    The laws of the State of Ohio govern this Agreement, the Plan and the Performance Shares granted hereby.

IN WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by its duly authorized officer as of March 13, 2023.

STONERIDGE, INC.

By /s/ Jim Zizelman                

Jim Zizelman

The foregoing is hereby accepted.

4

EX-10.5

Exhibit 10.5

STONERIDGE, INC.

LONG-TERM INCENTIVE PLAN

2023 RESTRICTED SHARE UNITS AGREEMENT

Stoneridge, Inc., an Ohio corporation (the “Company”), pursuant to the terms and conditions hereof, hereby grants to ___________ (“Grantee”) the right to receive, subject to continued service, ___________ Common Shares, without par value, of the Company (the “Share Units”), subject to the terms and conditions of this Agreement (the “Agreement”).

1.    The Share Units are in all respects subject to the terms, conditions and provisions of this Agreement and the Company’s 2016 Long-Term Incentive Plan (the “Plan”), as administered by the Compensation Committee of the Board of Directors (the “Committee”). Terms not defined herein are defined in the Plan.

2.    If earned the Share Units will be paid on a one-for-one basis in Company Common Shares. The right to receive the Company Common Shares and Share Units will be forfeited to the Company if the Grantee’s employment with the Company is terminated prior to March 2, 2026, except in the case of (i) retirement, (ii) death, (iii) Permanent Disability, (iv) Change in Control or (v) termination without cause, each as provided below. In the event Grantee’s employment with the Company is terminated prior to March 2, 2026 the forfeiture of the right to receive Company Common Shares and Share Units pursuant to this Section 2 will occur immediately after such termination of employment.

3.If the employment of the Grantee is not terminated prior to March 2, 2026, the Share Units shall be earned and paid on a one-for-one basis in Company common shares on March 2, 2026.

4.    If earned, the Company Common Shares will be issued in the name of the Grantee. The Company’s transfer agent and/or share transfer records will show the Grantee as the owner of record of the Company Common Shares as of the date earned. The certificate or certificates representing the Company Common Shares earned may, at the Company's discretion, be in uncertificated (electronic or book entry) form.

5.    Notwithstanding the foregoing, in addition to earning the Share Units as set forth above, the Share Units shall be earned upon the occurrence of an event and in the amounts as described below.

a)the Grantee’s retirement, whereby the Share Units granted shall be earned on the date of retirement, subject to the following conditions: only a Grantee who (i) is 63 or older on the date of retirement, (ii) has provided written notice to the Committee of the intent to retire at least three (3) months prior to the retirement date, and (iii) has executed prior to retirement a customary one year non-competition agreement shall be permitted to have his or her Share Units earned upon retirement.

b)    the Grantee’s death or Permanent Disability;

c)    a Change in Control and within 24 months following such Change in Control the Grantee’s employment is terminated by the Company other than for Cause; or,

d)    the termination “without cause” of the Grantee’s employment by the Company; provided, however only in proportion to the number of months, including any partial month, elapsed in the Performance Period divided by 36. In the event of termination “without cause”, the number of months considered to have elapsed in the Performance Period will be counted beginning from the Award grant date and end on the date that notice of termination is provided to or by the Grantee, except in situations where a different date is legally required.

A certificate or certificates representing the Common Shares earned shall be delivered to the Grantee or the Grantee’s estate after the occurrence of an event described above as soon as practical, but in no event shall be delivered later than the 15th day of the third month following the year in which Share Units were earned.

6.    On any change in the number or kind of outstanding common shares of the Company by reason of a recapitalization, merger, consolidation, reorganization, separation, liquidation, share split, share dividend, combination of shares or any other change in the corporate structure or Common Shares of the Company, the Company, by action of the Committee, is empowered to make such adjustment, if any, in the number and kind of Share Units subject to this Agreement as it considers appropriate for the protection of the Company and of the Grantee.

7.    No later than the date as of which an amount first becomes includable in the gross income of the Grantee for income tax purposes with respect to the Performance Shares granted hereunder, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any taxes (federal, state, local or other required taxes), or any kind of withholding required by law with respect to that amount. Unless otherwise determined by the Committee, minimum statutory withholding obligations may be settled with Common Shares that have been earned. The making of that payment or those arrangements is a condition to the obligations of the Company under the Plan, and the Company and its subsidiaries and affiliates may, to the extent permitted by law, deduct any taxes from any payment of any kind otherwise payable to the Grantee.

    8.    Nothing in this Agreement shall affect in any manner any conflicting or other provision of any other agreement between the Grantee and the Company. Nothing contained in this Agreement shall limit whatever right the Company might otherwise have to terminate the employment of the Grantee.

9.    The laws of the State of Ohio govern this Agreement, the Plan and the Share Units granted hereby.

IN WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by its duly authorized officer as of the March 13, 2023.

STONERIDGE, INC.

By    /s/ Jim Zizelman            

Jim Zizelman

The foregoing is hereby accepted.

1

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES–OXLEY ACT OF 2002

I, James Zizelman certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of Stoneridge, Inc. (the “Company”);

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

(4)The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the Company and we have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

(5)The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ James Zizelman

James Zizelman, President and Chief Executive Officer

May 3, 2023

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES–OXLEY ACT OF 2002

I, Matthew R. Horvath, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of Stoneridge, Inc. (the “Company”);

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

(4)The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the Company and we have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

(5)The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ Matthew R. Horvath

Matthew R. Horvath
Chief Financial Officer and Treasurer

May 3, 2023

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, James Zizelman, President and Chief Executive Officer of Stoneridge, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2023 (“the Report”) which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James Zizelman

James Zizelman, President and Chief Executive Officer

May 3, 2023

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew R. Horvath, Chief Financial Officer and Treasurer of Stoneridge, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2023 (“the Report”) which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Matthew R. Horvath

Matthew R. Horvath
Chief Financial Officer and Treasurer

May 3, 2023

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-13337
Entity Registrant Name	STONERIDGE, INC
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-1598949
Entity Address, Address Line One	39675 MacKenzie Drive, Suite 400
Entity Address, City or Town	Novi
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48377
City Area Code	248
Local Phone Number	489-9300
Title of 12(g) Security	Common Shares
Trading Symbol	SRI
Amendment Flag	false
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,513,330
Entity Central Index Key	0001043337
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Filer Category	Accelerated Filer

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 35,165	$ 54,798
Accounts receivable, less reserves of $853 and $962, respectively	175,666	158,155
Inventories, net	168,701	152,580
Prepaid expenses and other current assets	43,604	44,018
Total current assets	423,136	409,551
Long-term assets:
Property, plant and equipment, net	107,591	104,643
Intangible assets, net	45,585	45,508
Goodwill	34,659	34,225
Operating lease right-of-use asset	13,352	13,762
Investments and other long-term assets, net	46,415	44,416
Total long-term assets	247,602	242,554
Total assets	670,738	652,105
Current liabilities:
Current portion of debt	1,456	1,450
Accounts payable	131,996	110,202
Accrued expenses and other current liabilities	68,547	66,040
Total current liabilities	201,999	177,692
Long-term liabilities:
Revolving credit facility	167,393	167,802
Deferred income taxes	8,310	8,498
Operating lease long-term liability	10,043	10,594
Other long-term liabilities	6,750	6,577
Total long-term liabilities	192,496	193,471
Shareholders' equity:
Preferred Shares, without par value, 5,000 shares authorized, none issued	0	0
Common Shares, without par value, 60,000 shares authorized, 28,966 and 28,966 shares issued and 27,513 and 27,341 shares outstanding at March 31, 2023 and December 31, 2022, respectively, with no stated value	0	0
Additional paid-in capital	225,956	232,758
Common Shares held in treasury, 1,453 and 1,625 shares at March 31, 2023 and December 31, 2022, respectively, at cost	(44,717)	(50,366)
Retained earnings	194,306	201,692
Accumulated other comprehensive loss	(99,302)	(103,142)
Total shareholders' equity	276,243	280,942
Total liabilities and shareholders' equity	$ 670,738	$ 652,105

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, reserves	$ 853	$ 962
Preferred shares, authorized (in shares)	5,000	5,000
Preferred shares, issued (in shares)	0	0
Common shares, authorized (in shares)	60,000	60,000
Common shares, issued (in shares)	28,966	28,966
Common shares, outstanding (in shares)	27,513	27,341
Common shares held in treasury, shares (in shares)	1,453	1,625

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net sales	$ 241,325	$ 221,058
Costs and expenses:
Cost of goods sold	198,523	179,615
Selling, general and administrative	29,863	27,399
Design and development	16,968	17,028
Operating loss	(4,029)	(2,984)
Interest expense, net	2,746	1,786
Equity in loss of investee	171	81
Other expense, net	1,148	1,331
Loss before income taxes	(8,094)	(6,182)
(Benefit) provision for income taxes	(708)	1,493
Net loss	$ (7,386)	$ (7,675)
Loss per share:
Basic (in dollars per share)	$ (0.27)	$ (0.28)
Diluted (in dollars per share)	$ (0.27)	$ (0.28)
Weighted-average shares outstanding:
Basic (in shares)	27,349,357	27,198,677
Diluted (in shares)	27,349,357	27,198,677

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net loss		$ (7,386)	$ (7,675)
Other comprehensive income (loss), net of tax:
Foreign currency translation	[1]	4,072	4,161
Unrealized (loss) gain on derivatives	[2]	(232)	1,048
Other comprehensive income, net of tax		3,840	5,209
Comprehensive loss		$ (3,546)	$ (2,466)

[1]  Net of tax expense of $144 for the three months ended March 31, 2022.

[2] Net of tax (benefit) expense of $(62) and $279 for the three months ended March 31, 2023 and 2022, respectively.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Tax (benefit) expense on foreign currency translation		$ 144
Tax (benefit) expense	$ (62)	$ 279

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
OPERATING ACTIVITIES:
Net loss	$ (7,386)	$ (7,675)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation	6,573	6,877
Amortization, including accretion and write-off of deferred financing costs	1,946	2,357
Deferred income taxes	(2,536)	(605)
Loss of equity method investee	171	81
Gain on sale of fixed assets	(886)	(94)
Share-based compensation expense	69	1,098
Excess tax deficiency related to share-based compensation expense	34	265
Changes in operating assets and liabilities:
Accounts receivable, net	(16,833)	(6,129)
Inventories, net	(15,228)	(9,812)
Prepaid expenses and other assets	1,943	(12,842)
Accounts payable	21,264	6,581
Accrued expenses and other liabilities	1,687	87
Net cash used for operating activities	(9,182)	(19,811)
INVESTING ACTIVITIES:
Capital expenditures, including intangibles	(10,110)	(7,368)
Proceeds from sale of fixed assets	1,355	132
Net cash used for investing activities	(8,755)	(7,236)
FINANCING ACTIVITIES:
Revolving credit facility borrowings	8,000	0
Revolving credit facility payments	(8,568)	(16,000)
Proceeds from issuance of debt	8,148	9,834
Repayments of debt	(8,475)	(10,311)
Repurchase of Common Shares to satisfy employee tax withholding	(1,224)	(669)
Net cash used for financing activities	(2,119)	(17,146)
Effect of exchange rate changes on cash and cash equivalents	423	34
Net change in cash and cash equivalents	(19,633)	(44,159)
Cash and cash equivalents at beginning of period	54,798	85,547
Cash and cash equivalents at end of period	35,165	41,388
Supplemental disclosure of cash flow information:
Cash paid for interest, net	2,494	1,435
Cash paid for income taxes, net	$ 2,611	$ 1,491

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total		Number of Common Shares outstanding	Number of treasury shares	Additional paid-in capital	Common Shares held in treasury	Retained earnings	Accumulated other comprehensive loss
Beginning balance (in shares) at Dec. 31, 2021			27,191
Beginning balance (in shares) at Dec. 31, 2021				1,775
Beginning balance at Dec. 31, 2021	$ 295,950				$ 232,490	$ (55,264)	$ 215,748	$ (97,024)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(7,675)						(7,675)
Unrealized gain (loss) on derivatives, net	1,048	[1]						1,048
Currency translation adjustments	4,161							4,161
Issuance of Common Shares ( in shares)			161	161
Repurchased Common Shares for treasury (in shares)			(36)	36
Repurchased Common Shares for treasury, net	4,093					4,093
Share-based compensation, net	(3,653)				(3,653)
Ending balance (in shares) at Mar. 31, 2022			27,316
Ending balance (in shares) at Mar. 31, 2022				1,650
Ending balance at Mar. 31, 2022	$ 293,924				228,837	(51,171)	208,073	(91,815)
Beginning balance (in shares) at Dec. 31, 2022	27,341		27,341
Beginning balance (in shares) at Dec. 31, 2022	1,625			1,625
Beginning balance at Dec. 31, 2022	$ 280,942				232,758	(50,366)	201,692	(103,142)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(7,386)						(7,386)
Unrealized gain (loss) on derivatives, net	(232)	[1]						(232)
Currency translation adjustments	4,072							4,072
Issuance of Common Shares ( in shares)			234	234
Repurchased Common Shares for treasury (in shares)			(62)	62
Repurchased Common Shares for treasury, net	5,649					5,649
Share-based compensation, net	$ (6,802)				(6,802)
Ending balance (in shares) at Mar. 31, 2023	27,513		27,513
Ending balance (in shares) at Mar. 31, 2023	1,453			1,453
Ending balance at Mar. 31, 2023	$ 276,243				$ 225,956	$ (44,717)	$ 194,306	$ (99,302)

[1] Net of tax (benefit) expense of $(62) and $279 for the three months ended March 31, 2023 and 2022, respectively.

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Basis of Presentation

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2022 Form 10-K.

Reclassifications

Certain prior period amounts have been reclassified to conform to their 2023 presentation in the condensed consolidated financial statements.

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Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”). The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met. The guidance will also allow companies to elect various optional expedients, which would allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2023. As of March 31, 2023, the Company has not yet had contracts modified due to rate reform.

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Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Incidental items that are not significant in the context of the contract are recognized as expense. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold. Customer returns only occur if products do not meet the specifications of the contract and are not connected to any repurchase obligations of the Company.

The Company does not have any financing components or significant payment terms as payment occurs shortly after the point of sale. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of operations. Shipping and handling costs associated with outbound freight after control over a product is transferred to the customer are accounted for as a fulfillment cost and are included in cost of sales.

Revenue by Reportable Segment

Control Devices. Our Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle. This segment includes product lines such as actuators, sensors, switches and connectors. We sell these products principally to the automotive market in the North American and Asia Pacific regions. To a lesser extent, we also sell these products to the commercial vehicle and agricultural markets in the North American and Asia

Pacific regions. Our customers included in these markets primarily consist of original equipment manufacturers (“OEM”) and companies supplying components directly to the OEMs (“Tier 1 supplier”).

Electronics. Our Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products and electronic control units. These products are sold principally to the commercial vehicle market primarily through our OEM and aftermarket channels in the European, North American and Asia Pacific regions. The vision and safety systems are sold principally to the commercial vehicle and off-highway vehicle markets in the European and North American regions.

Stoneridge Brazil. Our Stoneridge Brazil segment primarily serves the South American region and specializes in the design, manufacture and sale of vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions. Stoneridge Brazil sells its products through the aftermarket distribution channel, to factory authorized dealer installers, also referred to as original equipment services, directly to OEMs and through mass merchandisers. In addition, monitoring services and tracking devices are sold directly to corporate customers and individual consumers.

The following tables disaggregate our revenue by reportable segment and geographical location(1) for the three months ended March 31, 2023 and 2022:

	Control Devices				Electronics				Stoneridge Brazil				Consolidated
Three months ended March 31,	2023		2022		2023		2022		2023		2022		2023		2022
Net Sales:
North America	$	75,681	$	71,490	$	48,045	$	32,338	$	—	$	—	$	123,726	$	103,828
South America	—		—		—		—		14,256		12,045		14,256		12,045
Europe	—		—		87,246		91,785		—		—		87,246		91,785
Asia Pacific	10,261		12,570		5,836		830		—		—		16,097		13,400
Total net sales	$	85,942	$	84,060	$	141,127	$	124,953	$	14,256	$	12,045	$	241,325	$	221,058

___________________________

(1)Company sales based on geographic location are where the sale originates not where the customer is located.

Performance Obligations

For OEM and Tier 1 supplier customers, the Company typically enters into contracts to provide serial production parts that consist of a set of documents including, but not limited to, an award letter, master purchase agreement and master terms and conditions. For each production product, the Company enters into separate purchase orders that contain the product specifications and an agreed-upon price. The performance obligation does not exist until a customer release is received for a specific number of parts. The majority of the parts sold to OEM and Tier 1 supplier customers are customized to the specific customer, with the exception of camera monitoring systems (“CMS”) sold through our aftermarket channel that are common across all customers. The transaction price is equal to the contracted price per part and there is no expectation of material variable consideration in the transaction price. For most customer contracts, the Company does not have an enforceable right to payment at any time prior to when the parts are shipped or delivered to the customer; therefore, the Company recognizes revenue at the point in time it satisfies a performance obligation by transferring control of a part to the customer. Certain customer contracts contain an enforceable right to payment if the customer terminates the contract for convenience and therefore are recognized over time using the cost to complete input method.

Our aftermarket products are focused on meeting the demand for repair and replacement parts, compliance parts and accessories and are sold primarily to aftermarket distributors and mass retailers in our South American, European and North American markets. Aftermarket products have one type of performance obligation which is the delivery of aftermarket parts and spare parts. For aftermarket customers, the Company typically has standard terms and conditions for all customers. In addition, aftermarket products have alternative use as they can be sold to multiple customers. Revenue for aftermarket part production contracts is recognized at a point in time when the control of the parts transfers to the customer which is based on the shipping terms. Aftermarket contracts may include variable consideration related to discounts and rebates which is included in the transaction price upon recognizing the product revenue.

A small portion of the Company’s sales are comprised of monitoring services that include both monitoring devices and fees to individual, corporate, fleet and cargo customers in our Stoneridge Brazil segment. These monitoring service contracts are

generally not capable of being distinct and are accounted for as a single performance obligation. We recognize revenue for our monitoring products and services contracts over the life of the contract. There is no variable consideration associated with these contracts. The Company has the right to consideration from a customer in the amount that corresponds directly with the value to the customer of the Company’s performance to date. Therefore, the Company recognizes revenue over time using the practical expedient ASC 606-10-55-18 in the amount the Company has a “right to invoice” rather than selecting an output or input method.

Contract Balances

The Company had no material contract assets, contract liabilities or capitalized contract acquisition costs as of March 31, 2023 and December 31, 2022.

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Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following:

	March 31, 2023		December 31, 2022
Raw materials	$	132,302	$	121,983
Work-in-progress	9,414		7,812
Finished goods	26,985		22,785
Total inventories, net	$	168,701	$	152,580

Inventory valued using the FIFO method was $154,203 and $139,996 at March 31, 2023 and December 31, 2022, respectively. Inventory valued using the average cost method was $14,498 and $12,584 at March 31, 2023 and December 31, 2022, respectively.

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Financial Instruments and Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

Financial Instruments

A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt, due to the variable interest rate on the Credit Facility and the maturity of the remaining outstanding debt.

Derivative Instruments and Hedging Activities

On March 31, 2023, the Company had no open foreign currency forward contracts. The Company used foreign currency forward contracts solely for hedging and not for speculative purposes during 2022. Management believes that its use of these instruments to reduce risk is in the Company’s best interest. The counterparties to these financial instruments have been financial institutions with investment grade credit ratings.

Foreign Currency Exchange Rate Risk

The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk. The Company uses derivative financial instruments as cash flow hedges and used net investment hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.

Net Investment Hedges

During 2021, the Company entered into two cross-currency swaps, designated as net investment hedges, with notional values of $25,000 each that were scheduled to mature in August 2026 and August 2028. These swaps hedged a portion of the net investment in a certain euro-denominated subsidiary.

The Company elected to assess hedge effectiveness of the net investment hedges under the spot method. Accordingly, periodic changes in the fair value of the derivative instruments attributable to factors other than spot exchange rate variability were excluded from the measurement of hedge ineffectiveness and reported directly in earnings each reporting period. The change in fair value of these derivative instruments was recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. The Company had no outstanding net investment hedges at March 31, 2023 or December 31, 2022.

Cash Flow Hedges

The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2022. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive loss fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions was measured using regression analysis and forecasted future purchases of the currency.

In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s condensed consolidated statements of operations as a component of other expense, net. During 2022, all of the Company’s foreign currency forward contracts were designated as cash flow hedges.

The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:

Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges

The Company held Mexican peso-denominated foreign currency forward contracts that expired ratably on a monthly basis from January 2022 to December 2022. The notional amount at December 31, 2022 related to Mexican peso-denominated foreign currency forward contracts was $0.

Interest Rate Risk

Interest Rate Risk – Cash Flow Hedge

On February 18, 2020, the Company entered into a floating-to-fixed interest rate swap agreement (the “Interest Rate Swap”) with a notional amount of $50,000 to hedge its exposure to interest payment fluctuations on a portion of its Credit Facility borrowings. The Interest Rate Swap matured on March 10, 2023. The Interest Rate Swap was designated as a cash flow hedge of the variable interest rate obligation under the Company's Credit Facility that has a current balance of $167,393 at March 31, 2023. Accordingly, the change in fair value of the Interest Rate Swap was recognized in accumulated other comprehensive loss. The Interest Rate Swap agreement required monthly settlements on the same days that the Credit Facility interest payments are due and had a maturity date of March 10, 2023, which was prior to the Credit Facility maturity date of June 4, 2024. Under the Interest Rate Swap terms, the Company paid a fixed interest rate and received a floating interest rate based on the one-month LIBOR, with a floor. The critical terms of the Interest Rate Swap were aligned with the terms of the Credit Facility, resulting in no hedge ineffectiveness. The difference between amounts to be received and paid under the Interest Rate Swap were recognized as a component of interest expense, net on the condensed consolidated statements of operations. The Interest Rate Swap settlements reduced interest expense, net by $290 and increased interest expense, net by $153 for the three months ended March 31, 2023 and 2022, respectively.

The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:

	Notional amounts (A)				Prepaid expenses  and other current assets
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Derivatives designated as hedging instruments:
Cash flow hedges:
Forward currency contracts	$	—	$	—	$	—	$	—
Interest rate swap	$	—	$	50,000	$	—	$	294
Net investment hedges:
Cross-currency swaps	$	—	$	—	$	—	$	—

_____________________________

(A)Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars.

Gross amounts recorded for the cash flow and net investment hedges in other comprehensive income and in net loss for the three months ended March 31 were as follows:

	Gain (loss) recorded in other comprehensive income				Gain (loss) reclassified from other comprehensive income into net loss (A)
	2023		2022		2023		2022
Derivatives designated as cash flow hedges:
Forward currency contracts	$	—	$	915	$	—	$	251
Interest rate swap	$	(4)	$	510	$	290	$	(153)
Derivatives designated as net investment hedges:
Cross-currency swaps	$	—	$	687	$	—	$	—

_____________________________

(A) Gains reclassified from other comprehensive income into net loss recognized in selling, general and administrative expenses (“SG&A”) in the Company’s condensed consolidated statements of operations were $0 and $51 for the three months ended March 31, 2023 and 2022, respectively. Gains reclassified from other comprehensive income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $0 and $199 for the three months ended March 31, 2023 and 2022, respectively. Gains (losses) reclassified from other comprehensive income into net loss recognized in interest expense, net in the Company’s condensed consolidated statements of operations were $290 and $(153) for the three months ended March 31, 2023 and 2022, respectively.

Cash flows from derivatives used to manage foreign currency exchange and interest rate risks are classified as operating activities within the condensed consolidated statements of cash flows.

Fair Value Measurements

Certain assets and liabilities held by the Company are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward currency and cross-currency contracts, inputs include forward foreign currency exchange rates. For the interest rate swap, inputs include LIBOR. Fair values estimated using Level 3 inputs consist of significant unobservable inputs.

The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used.

			March 31, 2023						December 31, 2022
			Fair values estimated using
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs		Fair value
Financial assets carried at fair value:
Interest rate swap	—		—		—		—		294
Total financial assets carried at fair value	$	—	$	—	$	—	$	—	$	294

The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.

	Stoneridge Brazil
		2022
Balance at January 1		$	7,351
Foreign currency adjustments		1,308
Balance at March 31		$	8,659

The Company was required to pay the Stoneridge Brazil earn-out consideration based on Stoneridge Brazil’s financial performance in 2021. The fair value of the Stoneridge Brazil earn-out consideration was based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) in 2021. The Stoneridge Brazil earn-out consideration obligation was recorded within accrued expenses and other current liabilities in the condensed consolidated balance sheets as of December 31, 2021. The earn-out consideration obligation of $8,272 was paid in April 2022 and recorded in the condensed consolidated statement of cash flows within operating and financing activities in the amounts of $1,996 and $6,276, respectively.

The foreign currency impact related to the Stoneridge Brazil earn-out consideration was included in other expense, net in the condensed consolidated statements of operations.

There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the three months ended March 31, 2023.

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Share-Based Compensation	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation	Share-Based CompensationCompensation expense for share-based compensation arrangements, which is recognized in the condensed consolidated statements of operations as a component of SG&A expenses, was $69 and $1,098 for the three months ended March 31, 2023 and 2022, respectively. The three months ended March 31, 2023 included income from the forfeiture of certain grants associated with employee resignations.

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Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following at March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022		Interest rates at March 31, 2023		Maturity
Revolving Credit Facility
Credit Facility	$	167,393	$	167,802	7.16	%	June 2024
Debt
Sweden short-term credit line	—		—
Suzhou short-term credit line	1,456		1,450		3.70%		June 2023
Total debt	1,456		1,450
Less: current portion	(1,456)		(1,450)
Total long-term debt, net	$	—	$	—

Revolving Credit Facility

On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility provided for a $400,000 senior secured revolving credit facility (which, as described below in the discussion of Amendment No. 3 to the Credit Facility was amended to be a $300,000 credit commitment) and it replaced and superseded the Third Amended and Restated Credit Agreement that provided for a $300,000 revolving credit facility. The Credit Facility had an accordion feature that allowed the Company to increase the availability by up to $150,000 upon the satisfaction of certain conditions and includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility. The Credit Facility has a termination date of June 5, 2024. Borrowings under the Credit Facility bear interest at either the Base Rate or the LIBOR rate, at the Company’s option, plus the applicable margin as set forth in the Credit Facility. The Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio.

The Credit Facility contains customary affirmative covenants and representations. The Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries. The Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $30,000, (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $30,000, (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.

Due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions on the Company’s end-markets and the resulting financial impacts on the Company, on February 28, 2022, the Company entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 3”). Amendment No. 3 reduced the total revolving credit commitments from $400.0 million to $300.0 million and the maximum permitted amount of swing loans from $40.0 million to $30.0 million. Amendment No. 3 provides for certain financial covenant relief and additional covenant restrictions during the “Specified Period” (the period from February 28, 2022 until the date that the Company delivers a compliance certificate for the quarter ending March 31, 2023 in form and substance satisfactory to the administrative agent). During the Specified Period:

•the maximum net leverage ratio was changed to 4.00 to 1.00 for the year ended December 31, 2021, suspended for the quarters ending March 31, 2022 through September 30, 2022 and could not exceed 4.75 to 1.00 for the quarter ended December 31, 2022 or 3.50 to 1.00 for the quarter ended March 31, 2023;

•the minimum interest coverage ratio of 3.50 was reduced to 2.50 for the quarter ended March 31, 2022, 2.25 for the quarter ended June 30, 2022 and 3.00 for the quarters ended September 30, 2022 and December 31, 2022;

•an additional condition to drawing on the Credit Facility has been added that restricts borrowings if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there are certain additional restrictions on Restricted Payments (as defined); and

•a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Specified Period.

Amendment No. 3 changed the leverage based LIBOR pricing grid through the maturity date and also retained a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain subject to a LIBOR floor of 0 basis points.

Amendment No. 3 also incorporated hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.

The Company capitalized $484 of deferred financing costs as a result of entering into Amendment No. 3. In connection with Amendment No. 3, the Company wrote off a portion of the previously recorded deferred financing costs of $365 in interest expense, net during the year ended December 31, 2022.

Due to continued supply chain disruptions and macroeconomic challenges on the Company’s end-markets and the resulting financial impacts on the Company, on March 1, 2023, the Company entered into Amendment No. 4 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 4”). Amendment No. 4 provides for certain financial covenant relief and additional covenant restrictions during the “Amendment No. 4 Specified Period” (the period from March 1, 2023 until the date that the Company delivers a compliance certificate for the quarter ending September 30, 2023 in form and substance satisfactory to the administrative agent). During the Amendment No. 4 Specified Period:

•the maximum net leverage ratio was changed to 4.75 to 1.00 for the quarter ended March 31, 2023 and 4.25 to 1.00 for the quarter ended June 30, 2023;

•the minimum interest coverage ratio of 3.50 was reduced to 3.00 for the quarters ended March 31, 2023 and June 30, 2023;

•drawing on the Credit Facility continues to be restricted if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

•there continue to be certain additional restrictions on Restricted Payments (as defined); and

•consistent with Amendment No. 3, a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Amendment No. 4 Specified Period.

The Company capitalized $332 of deferred financing costs as a result of entering into Amendment No. 4.

Borrowings outstanding on the Credit Facility were $167,393 and $167,802 at March 31, 2023 and December 31, 2022, respectively.

As a result of the amendments, the Company was in compliance with all Credit Facility covenants at March 31, 2023 and December 31, 2022.

The Company also has outstanding letters of credit of $1,626 at both March 31, 2023 and December 31, 2022.

Debt

The Company’s wholly owned subsidiary located in Stockholm, Sweden, has an overdraft credit line that allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $1,928 and $1,922, at March 31, 2023 and December 31, 2022, respectively. At March 31, 2023 and December 31, 2022, there were no borrowings outstanding on this overdraft credit line. During the three months ended March 31, 2023, the subsidiary borrowed and repaid 85,054 Swedish krona, or $8,197.

The Company’s wholly owned subsidiary located in Suzhou, China (the “Suzhou subsidiary”), has lines of credit (the “Suzhou credit line”) that allow up to a maximum borrowing level of 20,000 Chinese yuan, or $2,912 and $2,900 at March 31, 2023 and December 31, 2022, respectively. At March 31, 2023 and December 31, 2022, there was $1,456 and $1,450, respectively, in borrowings outstanding on the Suzhou credit line with weighted-average interest rates of 3.70% at both March 31, 2023 and December 31, 2022, respectively. The Suzhou credit line is included on the condensed

consolidated balance sheet within current portion of debt. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms by 180 days. The bank acceptance draft line of credit allows up to a maximum borrowing level of 60,000 Chinese yuan, or $8,737 and $8,699 at March 31, 2023 and December 31, 2022, respectively. There was $4,004 and $1,998 utilized on the Suzhou bank acceptance draft line of credit at March 31, 2023 and December 31, 2022, respectively. The Suzhou bank acceptance draft line of credit is included on the condensed consolidated balance sheet within accounts payable.

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Loss Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Loss Per Share

Loss Per Share

Basic loss per share was computed by dividing net loss by the weighted-average number of Common Shares outstanding for each respective period. Diluted loss per share was calculated by dividing net income by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. However, for all periods in which the Company recognized a net loss, the Company did not recognize the effect of the potential dilutive securities as their inclusion would be anti-dilutive. Potential dilutive shares of 292,860 and 218,727 for the three months ended March 31, 2023 and 2022, respectively, were excluded from diluted loss per share because the effect would be anti-dilutive.

Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows:

	Three months ended March 31,
	2023	2022
Basic weighted-average Common Shares outstanding	27,349,357	27,198,677
Effect of dilutive shares	—	—
Diluted weighted-average Common Shares outstanding	27,349,357	27,198,677

There were 521,304 and 797,873 performance-based right to receive Common Shares outstanding at March 31, 2023 and 2022, respectively. The right to receive Common Shares are included in the computation of diluted earnings per share based on the number of Common Shares that would be issuable if the end of the quarter were the end of the contingency period.

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Accumulated Other Comprehensive (Loss) Income

3 Months Ended

Mar. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive (Loss) Income

Accumulated Other Comprehensive (Loss) Income

Changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022 were as follows:

	Foreign currency translation		Unrealized gain (loss) on derivatives		Total
Balance at January 1, 2023	$	(103,374)	$	232	$	(103,142)
Other comprehensive income (loss) before reclassifications	4,072		(3)		4,069
Amounts reclassified from accumulated other comprehensive loss	—		(229)		(229)
Net other comprehensive income (loss), net of tax	4,072		(232)		3,840
Balance at March 31, 2023	$	(99,302)	$	—	$	(99,302)
Balance at January 1, 2022	$	(97,203)	$	179	$	(97,024)
Other comprehensive income before reclassifications	4,161		1,126		5,287
Amounts reclassified from accumulated other comprehensive loss	—		(78)		(78)
Net other comprehensive income, net of tax	4,161		1,048		5,209
Balance at March 31, 2022	$	(93,042)	$	1,227	$	(91,815)

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesFrom time to time, we are subject to various legal actions and claims incidental to our business, including those arising out of breach of contracts, product warranties, product liability, patent infringement, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably

estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters will not have a material adverse effect on its consolidated results of operations or financial position.

As a result of environmental studies performed at the Company’s former facility located in Sarasota, Florida, the Company became aware of soil and groundwater contamination at the site. The Company engaged an environmental engineering consultant to assess the level of contamination and to develop a remediation and monitoring plan for the site. Soil remediation at the site was completed during the year ended December 31, 2010. A remedial action plan was approved by the Florida Department of Environmental Protection and groundwater remediation began in the fourth quarter of 2015. During the three months ended March 31, 2023 and 2022, the Company recognized expense of $125 and $0 respectively, related to groundwater remediation. At March 31, 2023 and December 31, 2022, the Company accrued $278 and $246, respectively, related to expected future remediation costs. At March 31, 2023 and December 31, 2022, $271 and $132, respectively, were recorded as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets while the remaining amounts as of March 31, 2023 and December 31, 2022 were recorded as a component of other long-term liabilities. Costs associated with the recorded liability will be incurred to complete the groundwater remediation and monitoring. The recorded liability is based on assumptions in the remedial action plan as well as estimates for future remediation activities. Although the Company sold the Sarasota facility and related property in December 2011, the liability to remediate the site contamination remains the responsibility of the Company. Due to the ongoing site remediation, the Company is currently required to maintain a $1,489 letter of credit for the benefit of the buyer.

The Company’s Stoneridge Brazil subsidiary has civil, labor and other tax contingencies (excluding income tax) for which the likelihood of loss is deemed to be reasonably possible, but not probable, by the Company’s legal advisors in Brazil. As a result, no provision has been recorded with respect to these contingencies, which amounted to R$47,898 ($9,428) and R$47,820 ($9,165) at March 31, 2023 and December 31, 2022, respectively. An unfavorable outcome on these contingencies could result in significant cost to the Company and adversely affect its results of operations.

On August 12, 2020, the Brazilian Administrative Counsel for Economic Defense (“CADE”) issued a ruling against Stoneridge Brazil for abuse of dominance and market foreclosure through its prior use of exclusivity provisions in agreements with its distributors. The CADE tribunal imposed a R$7,995 ($1,574) fine which is included in the reasonably possible contingencies noted above. The Company is challenging this ruling in Brazilian federal court to reverse this decision by the CADE tribunal.

Product Warranty and Recall

Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims, forecasts of the resolution of existing claims, expected future claims on products sold and commercial discussions with our customers. The key factors in our estimate are the warranty period and the customer source. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Product warranty and recall reserve included $4,979 and $4,437 of a long-term liability at March 31, 2023 and December 31, 2022, respectively, which is included as a component of other long-term liabilities on the condensed consolidated balance sheets.

The following provides a reconciliation of changes in product warranty and recall reserve liability:

Three months ended March 31,	2023		2022
Product warranty and recall reserve at beginning of period	$	13,477	$	9,846
Accruals for warranties established during period	4,329		3,058
Aggregate changes in pre-existing liabilities due to claim developments	141		—
Settlements made during the period	(2,025)		(2,992)
Foreign currency translation	66		(94)
Product warranty and recall reserve at end of period	$	15,988	$	9,818

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Business Realignment and Restructuring

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Business Realignment and Restructuring

Business Realignment and Restructuring

On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line. The decision to exit the PM sensor product line was made after consideration of the decline in the market outlook for diesel passenger vehicles, the current and expected profitability of the product line and the Company’s strategic focus on aligning resources with the greatest opportunities. In conjunction with the strategic exit of the PM sensor product line, the Company entered into an asset purchase agreement related to the sale of the PM sensor product line during the first quarter of 2021.

The only remaining costs relate to potential commercial settlements and legal fees which we continue to negotiate. The estimated range of additional cost related to these settlements and fees is up to $4,200.

The settlement of liabilities associated with the exit of the PM sensor line that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	35		—		(35)		—		—
Total	$	35	$	—	$	(35)	$	—	$	—

On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”). The costs for the Canton Restructuring included employee severance and termination costs, contract terminations costs, professional fees and other related costs such as moving and set-up costs for equipment and costs to restore the engineering function previously located at the Canton facility. We do not expect to incur additional costs related to the Canton Restructuring.

The settlement of liabilities associated with for the Canton Restructuring that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	$	93	$	—	$	(93)	$	—	$	—
Total	$	93	$	—	$	(93)	$	—	$	—

In addition to specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs that are referred to as business realignment charges.

Business realignment charges incurred by reportable segment were as follows:

	Three months ended March 31,
	2023		2022
Electronics (A)	309		—
Stoneridge Brazil (B)	—		34
Unallocated Corporate (C)	953		—
Total business realignment charges	$	1,262	$	34

_____________________________________

(A) Severance costs for the three months ended March 31, 2023 related to COGS and SG&A were $175 and $134, respectively.

(B) Severance costs for the three months ended March 31, 2022 related to SG&A were $34.

(C) Employee separation related costs for the three months ended March 31, 2023 related to SG&A were $953.

Business realignment charges incurred, classified by statement of operations line item were as follows:

	Three months ended March 31,
	2023		2022
Cost of goods sold	$	175	$	—
Selling, general and administrative	1,087		34
Total business realignment charges	$	1,262	$	34

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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For interim tax reporting, we estimate our annual effective tax rate and apply it to our year to date ordinary income. Tax jurisdictions with a projected or year to date loss for which a benefit cannot be realized are excluded.

For the three months ended March 31, 2023, income tax benefit of $708 was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of 8.7% varies from the statutory rate primarily due to U.S. taxes on foreign earnings and non-deductible expenses offset by the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions and tax credits and incentives.

For the three months ended March 31, 2022, income tax expense of $1,493 was attributable to the mix of earnings among tax jurisdictions as well as tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions. The effective tax rate of (24.2)% varies from the statutory rate primarily due to the impact of tax losses for which no benefit is recognized due to valuation allowances in certain jurisdictions as well as U.S. tax on foreign earnings offset by tax credits and incentives.

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Segment Reporting

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer.

The Company has three reportable segments, Control Devices, Electronics and Stoneridge Brazil, which also represent its operating segments. The Control Devices reportable segment produces actuators, sensors, switches and connectors. The Electronics reportable segment produces driver information systems, vision and safety systems, connectivity and compliance products and electronic control units. The Stoneridge Brazil reportable segment designs and manufactures vehicle tracking devices and monitoring services, vehicle security alarms and convenience accessories, in-vehicle audio and infotainment devices, driver information systems and telematics solutions.

The accounting policies of the Company’s reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies” of the Company’s 2022 Form 10-K. The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, capital expenditures and operating income. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.

The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Corporate costs include various support functions, such as accounting/finance, executive administration, human resources, information technology and legal.

A summary of financial information by reportable segment is as follows:

Three months ended March 31,	2023		2022
Net Sales:
Control Devices	$	85,942	$	84,060
Inter-segment sales	734		930
Control Devices net sales	86,676		84,990
Electronics	141,127		124,953
Inter-segment sales	8,516		7,711
Electronics net sales	149,643		132,664
Stoneridge Brazil	14,256		12,045
Inter-segment sales	—		—
Stoneridge Brazil net sales	14,256		12,045
Eliminations	(9,250)		(8,641)
Total net sales	$	241,325	$	221,058
Operating (Loss) Income:
Control Devices	$	2,087	$	6,776
Electronics	1,400		(2,712)
Stoneridge Brazil	1,343		492
Unallocated Corporate (A)	(8,859)		(7,540)
Total operating loss	$	(4,029)	$	(2,984)
Depreciation and Amortization:
Control Devices	$	3,174	$	3,561
Electronics	3,464		3,593
Stoneridge Brazil	1,085		991
Unallocated Corporate	602		561
Total depreciation and amortization (B)	$	8,325	$	8,706
Interest Expense (Income), net:
Control Devices	$	18	$	25
Electronics	485		73
Stoneridge Brazil	(270)		(158)
Unallocated Corporate	2,513		1,846
Total interest expense, net	$	2,746	$	1,786
Capital Expenditures:
Control Devices	$	1,956	$	3,845
Electronics	6,207		2,833
Stoneridge Brazil	636		669
Unallocated Corporate(C)	112		21
Total capital expenditures	$	8,911	$	7,368

	March 31, 2023		December 31, 2022
Total Assets:
Control Devices	$	177,154	$	174,535
Electronics	380,666		369,232
Stoneridge Brazil	64,128		60,861
Corporate (C)	421,554		419,469
Eliminations	(372,764)		(371,992)
Total assets	$	670,738	$	652,105

The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates:

Three months ended March 31,	2023		2022
Net Sales:
North America	$	123,726	$	103,828
South America	14,256		12,045
Europe and Other	103,343		105,185
Total net sales	$	241,325	$	221,058

	March 31, 2023		December 31, 2022
Long-term Assets:
North America	$	94,451	$	92,149
South America	32,471		31,796
Europe and Other	120,680		118,609
Total long-term assets	$	247,602	$	242,554

__________________________________________________________

(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.

(B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.

(C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries.

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Investments

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments

Investments

PST Eletrônica Ltda.

The Company had a 74% controlling interest in Stoneridge Brazil from December 31, 2011 through May 15, 2017. On May 16, 2017, the Company acquired the remaining 26% noncontrolling interest in Stoneridge Brazil. As part of the acquisition agreement, the Company was required to pay additional earn-out consideration based on Stoneridge Brazil’s financial performance in 2021. The final earn-out consideration of $8,272 was paid on April 29, 2022. See Note 5 for the fair value and foreign currency adjustments of the earn-out consideration in prior periods.

Other Investments

In December 2018, the Company entered into an agreement to make a $10,000 investment in a fund (“Autotech Fund II”) managed by Autotech Ventures (“Autotech”), a venture capital firm focused on ground transportation technology which is accounted for under the equity method of accounting. The Company’s $10,000 investment in the Autotech Fund II will be contributed over the expected ten-year life of the fund. The Company did not contribute to or receive distributions from

Autotech Fund II during the three months ended March 31, 2023 or 2022. The Company has a 6.5% interest in Autotech Fund II. The Company recognized losses of $171 and $81 during the three months ended March 31, 2023 and 2022, respectively. The Autotech Fund II investment recorded in investments and other long-term assets in the condensed consolidated balance sheets was $8,473 and $8,644 as of March 31, 2023 and December 31, 2022, respectively.

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Recently Issued Accounting Standards (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of PresentationThe accompanying condensed consolidated financial statements have been prepared by Stoneridge, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s 2022 Form 10-K.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to their 2023 presentation in the condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”). The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met. The guidance will also allow companies to elect various optional expedients, which would allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2023. As of March 31, 2023, the Company has not yet had contracts modified due to rate reform.

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Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue by Segment and Geographical Location

The following tables disaggregate our revenue by reportable segment and geographical location(1) for the three months ended March 31, 2023 and 2022:

	Control Devices				Electronics				Stoneridge Brazil				Consolidated
Three months ended March 31,	2023		2022		2023		2022		2023		2022		2023		2022
Net Sales:
North America	$	75,681	$	71,490	$	48,045	$	32,338	$	—	$	—	$	123,726	$	103,828
South America	—		—		—		—		14,256		12,045		14,256		12,045
Europe	—		—		87,246		91,785		—		—		87,246		91,785
Asia Pacific	10,261		12,570		5,836		830		—		—		16,097		13,400
Total net sales	$	85,942	$	84,060	$	141,127	$	124,953	$	14,256	$	12,045	$	241,325	$	221,058

___________________________

(1)Company sales based on geographic location are where the sale originates not where the customer is located.

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Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories consist of the following:

	March 31, 2023		December 31, 2022
Raw materials	$	132,302	$	121,983
Work-in-progress	9,414		7,812
Finished goods	26,985		22,785
Total inventories, net	$	168,701	$	152,580

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Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Notional Amounts and Fair Values of Derivative Instruments in the Consolidated Balance

The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:

	Notional amounts (A)				Prepaid expenses  and other current assets
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Derivatives designated as hedging instruments:
Cash flow hedges:
Forward currency contracts	$	—	$	—	$	—	$	—
Interest rate swap	$	—	$	50,000	$	—	$	294
Net investment hedges:
Cross-currency swaps	$	—	$	—	$	—	$	—

_____________________________

(A)Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars.

Amounts Recorded for the Cash Flow Hedges in Other Comprehensive Income (Loss) in Shareholders' Equity and in Net Income

Gross amounts recorded for the cash flow and net investment hedges in other comprehensive income and in net loss for the three months ended March 31 were as follows:

	Gain (loss) recorded in other comprehensive income				Gain (loss) reclassified from other comprehensive income into net loss (A)
	2023		2022		2023		2022
Derivatives designated as cash flow hedges:
Forward currency contracts	$	—	$	915	$	—	$	251
Interest rate swap	$	(4)	$	510	$	290	$	(153)
Derivatives designated as net investment hedges:
Cross-currency swaps	$	—	$	687	$	—	$	—

_____________________________

(A) Gains reclassified from other comprehensive income into net loss recognized in selling, general and administrative expenses (“SG&A”) in the Company’s condensed consolidated statements of operations were $0 and $51 for the three months ended March 31, 2023 and 2022, respectively. Gains reclassified from other comprehensive income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $0 and $199 for the three months ended March 31, 2023 and 2022, respectively. Gains (losses) reclassified from other comprehensive income into net loss recognized in interest expense, net in the Company’s condensed consolidated statements of operations were $290 and $(153) for the three months ended March 31, 2023 and 2022, respectively.

Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used.

			March 31, 2023						December 31, 2022
			Fair values estimated using
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs		Fair value
Financial assets carried at fair value:
Interest rate swap	—		—		—		—		294
Total financial assets carried at fair value	$	—	$	—	$	—	$	—	$	294

Summary of the Change in Fair Value of the Level 3 Financial Liabilities Related to Contingent Consideration

The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.

	Stoneridge Brazil
		2022
Balance at January 1		$	7,351
Foreign currency adjustments		1,308
Balance at March 31		$	8,659

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Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Debt

Debt consisted of the following at March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022		Interest rates at March 31, 2023		Maturity
Revolving Credit Facility
Credit Facility	$	167,393	$	167,802	7.16	%	June 2024
Debt
Sweden short-term credit line	—		—
Suzhou short-term credit line	1,456		1,450		3.70%		June 2023
Total debt	1,456		1,450
Less: current portion	(1,456)		(1,450)
Total long-term debt, net	$	—	$	—

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Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Weighted-Average Number of Shares

Weighted-average Common Shares outstanding used in calculating basic and diluted earnings per share were as follows:

	Three months ended March 31,
	2023	2022
Basic weighted-average Common Shares outstanding	27,349,357	27,198,677
Effect of dilutive shares	—	—
Diluted weighted-average Common Shares outstanding	27,349,357	27,198,677

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Accumulated Other Comprehensive (Loss) Income (Tables)

3 Months Ended

Mar. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive (Loss) Income by Component

Changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022 were as follows:

	Foreign currency translation		Unrealized gain (loss) on derivatives		Total
Balance at January 1, 2023	$	(103,374)	$	232	$	(103,142)
Other comprehensive income (loss) before reclassifications	4,072		(3)		4,069
Amounts reclassified from accumulated other comprehensive loss	—		(229)		(229)
Net other comprehensive income (loss), net of tax	4,072		(232)		3,840
Balance at March 31, 2023	$	(99,302)	$	—	$	(99,302)
Balance at January 1, 2022	$	(97,203)	$	179	$	(97,024)
Other comprehensive income before reclassifications	4,161		1,126		5,287
Amounts reclassified from accumulated other comprehensive loss	—		(78)		(78)
Net other comprehensive income, net of tax	4,161		1,048		5,209
Balance at March 31, 2022	$	(93,042)	$	1,227	$	(91,815)

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty and Recall Liability

The following provides a reconciliation of changes in product warranty and recall reserve liability:

Three months ended March 31,	2023		2022
Product warranty and recall reserve at beginning of period	$	13,477	$	9,846
Accruals for warranties established during period	4,329		3,058
Aggregate changes in pre-existing liabilities due to claim developments	141		—
Settlements made during the period	(2,025)		(2,992)
Foreign currency translation	66		(94)
Product warranty and recall reserve at end of period	$	15,988	$	9,818

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Business Realignment and Restructuring (Tables)

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The settlement of liabilities associated with the exit of the PM sensor line that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	35		—		(35)		—		—
Total	$	35	$	—	$	(35)	$	—	$	—

The settlement of liabilities associated with for the Canton Restructuring that relate to the Control Devices reportable segment include the following:

	Accrual as of January 1, 2022		2022 Charge to Expense		Utilization				Accrual as of March 31, 2022
					Cash		Non-Cash
Employee termination benefits	$	93	$	—	$	(93)	$	—	$	—
Total	$	93	$	—	$	(93)	$	—	$	—

Business realignment charges incurred by reportable segment were as follows:

	Three months ended March 31,
	2023		2022
Electronics (A)	309		—
Stoneridge Brazil (B)	—		34
Unallocated Corporate (C)	953		—
Total business realignment charges	$	1,262	$	34

_____________________________________

(A) Severance costs for the three months ended March 31, 2023 related to COGS and SG&A were $175 and $134, respectively.

(B) Severance costs for the three months ended March 31, 2022 related to SG&A were $34.

(C) Employee separation related costs for the three months ended March 31, 2023 related to SG&A were $953.

Schedule of Business Realignment Charges Classified by Statement of Operations

Business realignment charges incurred, classified by statement of operations line item were as follows:

	Three months ended March 31,
	2023		2022
Cost of goods sold	$	175	$	—
Selling, general and administrative	1,087		34
Total business realignment charges	$	1,262	$	34

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

A summary of financial information by reportable segment is as follows:

Three months ended March 31,	2023		2022
Net Sales:
Control Devices	$	85,942	$	84,060
Inter-segment sales	734		930
Control Devices net sales	86,676		84,990
Electronics	141,127		124,953
Inter-segment sales	8,516		7,711
Electronics net sales	149,643		132,664
Stoneridge Brazil	14,256		12,045
Inter-segment sales	—		—
Stoneridge Brazil net sales	14,256		12,045
Eliminations	(9,250)		(8,641)
Total net sales	$	241,325	$	221,058
Operating (Loss) Income:
Control Devices	$	2,087	$	6,776
Electronics	1,400		(2,712)
Stoneridge Brazil	1,343		492
Unallocated Corporate (A)	(8,859)		(7,540)
Total operating loss	$	(4,029)	$	(2,984)
Depreciation and Amortization:
Control Devices	$	3,174	$	3,561
Electronics	3,464		3,593
Stoneridge Brazil	1,085		991
Unallocated Corporate	602		561
Total depreciation and amortization (B)	$	8,325	$	8,706
Interest Expense (Income), net:
Control Devices	$	18	$	25
Electronics	485		73
Stoneridge Brazil	(270)		(158)
Unallocated Corporate	2,513		1,846
Total interest expense, net	$	2,746	$	1,786
Capital Expenditures:
Control Devices	$	1,956	$	3,845
Electronics	6,207		2,833
Stoneridge Brazil	636		669
Unallocated Corporate(C)	112		21
Total capital expenditures	$	8,911	$	7,368

	March 31, 2023		December 31, 2022
Total Assets:
Control Devices	$	177,154	$	174,535
Electronics	380,666		369,232
Stoneridge Brazil	64,128		60,861
Corporate (C)	421,554		419,469
Eliminations	(372,764)		(371,992)
Total assets	$	670,738	$	652,105

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

The following tables present net sales and long-term assets for each of the geographic areas in which the Company operates:

Three months ended March 31,	2023		2022
Net Sales:
North America	$	123,726	$	103,828
South America	14,256		12,045
Europe and Other	103,343		105,185
Total net sales	$	241,325	$	221,058

	March 31, 2023		December 31, 2022
Long-term Assets:
North America	$	94,451	$	92,149
South America	32,471		31,796
Europe and Other	120,680		118,609
Total long-term assets	$	247,602	$	242,554

__________________________________________________________

(A)Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.

(B)These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.

(C)Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the corporate headquarter building, leased assets, information technology assets, equity investments and investments in subsidiaries.

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Revenue - Revenue by Segment and Geographical Location (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total net sales	$ 241,325	$ 221,058
North America
Disaggregation of Revenue [Line Items]
Total net sales	123,726	103,828
South America
Disaggregation of Revenue [Line Items]
Total net sales	14,256	12,045
Europe
Disaggregation of Revenue [Line Items]
Total net sales	87,246	91,785
Asia Pacific
Disaggregation of Revenue [Line Items]
Total net sales	16,097	13,400
Control Devices
Disaggregation of Revenue [Line Items]
Total net sales	85,942	84,060
Control Devices | North America
Disaggregation of Revenue [Line Items]
Total net sales	75,681	71,490
Control Devices | South America
Disaggregation of Revenue [Line Items]
Total net sales	0	0
Control Devices | Europe
Disaggregation of Revenue [Line Items]
Total net sales	0	0
Control Devices | Asia Pacific
Disaggregation of Revenue [Line Items]
Total net sales	10,261	12,570
Electronics
Disaggregation of Revenue [Line Items]
Total net sales	141,127	124,953
Electronics | North America
Disaggregation of Revenue [Line Items]
Total net sales	48,045	32,338
Electronics | South America
Disaggregation of Revenue [Line Items]
Total net sales	0	0
Electronics | Europe
Disaggregation of Revenue [Line Items]
Total net sales	87,246	91,785
Electronics | Asia Pacific
Disaggregation of Revenue [Line Items]
Total net sales	5,836	830
Stoneridge Brazil
Disaggregation of Revenue [Line Items]
Total net sales	14,256	12,045
Stoneridge Brazil | North America
Disaggregation of Revenue [Line Items]
Total net sales	0	0
Stoneridge Brazil | South America
Disaggregation of Revenue [Line Items]
Total net sales	14,256	12,045
Stoneridge Brazil | Europe
Disaggregation of Revenue [Line Items]
Total net sales	0	0
Stoneridge Brazil | Asia Pacific
Disaggregation of Revenue [Line Items]
Total net sales	$ 0	$ 0

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Revenue - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 0	$ 0
Contract liabilities	0	0
Capitalized contract acquisition costs	$ 0	$ 0

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 132,302	$ 121,983
Work-in-progress	9,414	7,812
Finished goods	26,985	22,785
Total inventories, net	$ 168,701	$ 152,580

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Inventories - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Inventory amount, FIFO	$ 154,203	$ 139,996
Inventory amount, weighted average cost	$ 14,498	$ 12,584

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Financial Instruments and Fair Value Measurements - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) contract	Feb. 18, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Revolving credit facility		$ 167,393		$ 167,802
Total interest expense, net		2,746	$ 1,786
Earn-out consideration, operating and financing activities	$ 8,272
Earn-out consideration cash payment within financing activities	6,276
Transfers in or out of Level 3		0
Non investment hedges
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Number of hedge contracts | contract					2
Non investment hedges | Net Investment Hedge Due 2026
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts					$ 25,000
Non investment hedges | Net Investment Hedge Due 2028
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts					$ 25,000
Cash flow hedges | Mexican Peso-Denominated Foreign Currency Forward Contracts
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts				0
Cash flow hedges | Interest rate swap
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts						$ 50,000
Total interest expense, net		290	$ 153
Cash flow hedges | Interest rate swap | Credit Facility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Revolving credit facility		167,393
Designated as Hedging Instrument | Cash flow hedges | Forward currency contracts
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts		0		0
Designated as Hedging Instrument | Cash flow hedges | Interest rate swap
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Notional amounts		$ 0		$ 50,000
Stoneridge Brazil
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Payment of earn-out consideration paid within operating activities	$ 1,996

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Financial Instruments and Fair Value Measurements - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Feb. 18, 2020
Forward currency contracts | Cash flow hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amounts	$ 0	$ 0
Interest rate swap | Cash flow hedges
Derivatives, Fair Value [Line Items]
Notional amounts			$ 50,000
Interest rate swap | Cash flow hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amounts	0	50,000
Cross-currency swaps | Non investment hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amounts	0	0
Prepaid expenses and other current assets | Forward currency contracts | Cash flow hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Financial assets carried at fair value	0	0
Prepaid expenses and other current assets | Interest rate swap | Cash flow hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Financial assets carried at fair value	0	294
Prepaid expenses and other current assets | Cross-currency swaps | Non investment hedges | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Financial assets carried at fair value	$ 0	$ 0

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Financial Instruments and Fair Value Measurements - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flow hedges | Designated as Hedging Instrument | Forward currency contracts
Derivatives designated as cash flow hedges:
Gain (loss) recorded in other comprehensive income	$ 0	$ 915
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	0	251
Cash flow hedges | Designated as Hedging Instrument | Interest rate swap
Derivatives designated as cash flow hedges:
Gain (loss) recorded in other comprehensive income	(4)	510
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	290	(153)
Cash flow hedges | Selling, General and Administrative Expenses | Designated as Hedging Instrument
Derivatives designated as cash flow hedges:
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	0	51
Cash flow hedges | Cost of Sales | Designated as Hedging Instrument
Derivatives designated as cash flow hedges:
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	0	199
Cash flow hedges | Interest Expense | Designated as Hedging Instrument
Derivatives designated as cash flow hedges:
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	290	(153)
Non investment hedges | Cross-currency swaps
Derivatives designated as cash flow hedges:
Gain (loss) recorded in other comprehensive income	0	687
Gain (loss) reclassified from other comprehensive (loss) income into net (loss) income	$ 0	$ 0

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Financial Instruments and Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair value - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial assets carried at fair value:
Interest rate swap	$ 0	$ 294
Total financial assets carried at fair value	0	$ 294
Level 1 inputs
Financial assets carried at fair value:
Interest rate swap	0
Total financial assets carried at fair value	0
Level 2 inputs
Financial assets carried at fair value:
Interest rate swap	0
Total financial assets carried at fair value	0
Level 3 inputs
Financial assets carried at fair value:
Interest rate swap	0
Total financial assets carried at fair value	$ 0

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Financial Instruments and Fair Value Measurements - Summary of the change in fair value of the Level 3 financial liabilities related to earn-out consideration (Details) - Stoneridge Brazil - Earnout Consideration $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at January 1	$ 7,351
Foreign currency adjustments	1,308
Balance at March 31	$ 8,659

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Share-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Selling, General and Administrative Expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 69	$ 1,098

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Revolving credit facility	$ 167,393	$ 167,802
Debt
Total debt	1,456	1,450
Less: current portion	(1,456)	(1,450)
Total long-term debt, net	0	0
Revolving Credit Facility
Debt Instrument [Line Items]
Revolving credit facility	$ 167,393	167,802
Debt
Maturity	June 2024
Outstanding credit lines interest rate	7.16%
Suzhou short-term credit line
Debt Instrument [Line Items]
Revolving credit facility	$ 1,456	1,450
Debt
Maturity	June 2023
Minimum | Suzhou short-term credit line
Debt
Outstanding credit lines interest rate	3.70%
Sweden short-term credit line
Debt Instrument [Line Items]
Revolving credit facility	$ 0	$ 0
Debt
Maturity
Outstanding credit lines interest rate

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Debt - Narrative (Details) ¥ in Thousands, kr in Thousands, $ in Thousands		3 Months Ended	12 Months Ended
	Feb. 28, 2022 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Mar. 31, 2023 SEK (kr)	Mar. 31, 2023 USD ($)	Mar. 31, 2023 CNY (¥)	Mar. 01, 2023 USD ($)	Feb. 28, 2023	Dec. 31, 2022 SEK (kr)	Dec. 31, 2022 USD ($)	Feb. 27, 2022 USD ($)	Jun. 05, 2019 USD ($)
Debt Instrument [Line Items]
Cash and cash equivalents					$ 35,165					$ 54,798
Revolving credit facility					167,393					167,802
Sweden short-term credit line
Debt Instrument [Line Items]
Revolving credit facility					0					0
Bridge Loan
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity											$ 40,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity											$ 400,000	$ 400,000
Increase in maximum borrowing capacity of credit facility												150
Debt instrument covenant default of other debt maximum amount					30,000
Debt instrument covenant uninsured asset losses maximum amount		$ 30,000
Revolving credit facility					167,393					167,802
Suzhou short-term credit line
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					2,912	¥ 20,000				2,900
Revolving credit facility					$ 1,456					1,450
Outstanding credit lines weighted-average interest rate				3.70%	3.70%	3.70%
Bank Acceptance Draft Credit Line
Debt Instrument [Line Items]
Revolving credit facility					$ 4,004					1,998
Credit facility, borrowing capacity					8,737	¥ 60,000				8,699
Letter of Credit
Debt Instrument [Line Items]
Outstanding letters of credit					1,626					1,626
Electronics | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity				kr 20,000	1,928				kr 20,000	1,922
Revolving credit facility				163	14				kr 18,973	$ 2,099
Line of credit				kr 85,054	$ 8,197
Credit Facility
Debt Instrument [Line Items]
Minimum interest coverage ratio								350.00%			3.50%
Amendment Three | Quarter Ended March 31, 2022
Debt Instrument [Line Items]
Minimum interest coverage ratio	2.50%
Amendment Three | Quarter Ended June 30, 2022
Debt Instrument [Line Items]
Minimum interest coverage ratio	2.25%
Amendment Three | Quarters Ended March 31, 2023 and December 31, 2022
Debt Instrument [Line Items]
Minimum interest coverage ratio				3.00%	3.00%	3.00%			3.00%	3.00%
Amendment Three | Bridge Loan
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 30,000
Amendment Three | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 300,000				$ 300,000
Capitalized deferred financing costs					484
Maximum leverage ratio	4.00%
Percent threshold of domestic cash	100.00%
Percent threshold of foreign cash	65.00%
Maximum net leverage ratio	3.50%
Write off of deferred financing costs			$ 365
Amendment Three | Revolving Credit Facility | Debt Instrument, Redemption, Period Four
Debt Instrument [Line Items]
Maximum leverage ratio	4.75%
Amendment Three | Revolving Credit Facility | Debt Instrument, Redemption, Period Five
Debt Instrument [Line Items]
Maximum leverage ratio	3.50%
Amendment Three | Revolving Credit Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Amendment Three | Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Cash and cash equivalents	$ 70,000
Amendment Three | Specified Hedge Borrowings | Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.00%
Amendment Four | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity												$ 300,000
Capitalized deferred financing costs					$ 332
Amendment Number Four | Quarter Ended March 31, 2022
Debt Instrument [Line Items]
Minimum interest coverage ratio							300.00%
Amendment Number Four | Revolving Credit Facility
Debt Instrument [Line Items]
Percent threshold of domestic cash							100.00%
Percent threshold of foreign cash							65.00%
Maximum net leverage ratio							350.00%
Amendment Number Four | Revolving Credit Facility | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Maximum leverage ratio							475.00%
Amendment Number Four | Revolving Credit Facility | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Maximum leverage ratio							425.00%
Amendment Number Four | Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Cash and cash equivalents							$ 70,000

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Loss Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Loss Carryforwards [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	292,860	218,727
Performance Based Right to Receive Common Shares
Operating Loss Carryforwards [Line Items]
Common shares, non-vested (in shares)	521,304	797,873

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Loss Per Share - Weighted Average Shares Outstanding Used in Calculating Basic and Diluted Net Income Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Basic weighted-average Common Shares outstanding (in shares)	27,349,357	27,198,677
Effect of dilutive shares (in shares)	0	0
Diluted weighted-average Common Shares outstanding (in shares)	27,349,357	27,198,677

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Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss) before reclassifications	$ 4,069	$ 5,287
Amounts reclassified from accumulated other comprehensive loss	(229)	(78)
Other comprehensive income, net of tax	3,840	5,209
Accumulated other comprehensive loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(103,142)	(97,024)
Ending balance	(99,302)	(91,815)
Foreign currency translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(103,374)	(97,203)
Other comprehensive income (loss) before reclassifications	4,072	4,161
Amounts reclassified from accumulated other comprehensive loss	0	0
Other comprehensive income, net of tax	4,072	4,161
Ending balance	(99,302)	(93,042)
Unrealized gain (loss) on derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	232	179
Other comprehensive income (loss) before reclassifications	(3)	1,126
Amounts reclassified from accumulated other comprehensive loss	(229)	(78)
Other comprehensive income, net of tax	(232)	1,048
Ending balance	$ 0	$ 1,227

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Commitments and Contingencies - Narrative (Details) R$ in Thousands, $ in Thousands			3 Months Ended
	Aug. 12, 2020 USD ($)	Aug. 12, 2020 BRL (R$)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 BRL (R$)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 BRL (R$)
Short-term Debt [Line Items]
Groundwater remediation expense			$ 125	$ 0
Environmental remediation accrued undiscounted liability			278			$ 246
Product warranty and recall accrual			4,979			4,437
Accrued expenses and other current liabilities
Short-term Debt [Line Items]
Environmental remediation accrued undiscounted liability			271			132
Letter of Credit
Short-term Debt [Line Items]
Line of credit			1,489
PST Eletronica Ltda | Civil, labor and other tax contingencies
Short-term Debt [Line Items]
Loss contingency, estimate of possible loss			$ 9,428		R$ 47,898	$ 9,165	R$ 47,820
PST Eletronica Ltda | Fine
Short-term Debt [Line Items]
Litigation amount	$ 1,574	R$ 7,995

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Commitments and Contingencies - Reconciliation of Changes in Product Warranty and Recall Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Product warranty and recall reserve at beginning of period	$ 13,477	$ 9,846
Accruals for warranties established during period	4,329	3,058
Aggregate changes in pre-existing liabilities due to claim developments	141	0
Settlements made during the period	(2,025)	(2,992)
Foreign currency translation	66	(94)
Product warranty and recall reserve at end of period	$ 15,988	$ 9,818

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Business Realignment and Restructuring - Narrative (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Particulate Matter Product Line Strategic Exit | Control Devices | Maximum
Restructuring Cost and Reserve [Line Items]
Estimated total cost	$ 4,200

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Business Realignment and Restructuring - Schedule of Restructuring and Related Costs (Details) - Control Devices $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Particulate Matter Product Line Strategic Exit
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ 35
Charge to expense	0
Cash payments	(35)
Utilization, Non-Cash	0
Ending balance	0
Canton Facility Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Beginning balance	93
Charge to expense	0
Cash payments	(93)
Utilization, Non-Cash	0
Ending balance	0
Employee termination benefits | Particulate Matter Product Line Strategic Exit
Restructuring Cost and Reserve [Line Items]
Beginning balance	35
Charge to expense	0
Cash payments	(35)
Utilization, Non-Cash	0
Ending balance	0
Employee termination benefits | Canton Facility Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Beginning balance	93
Charge to expense	0
Cash payments	(93)
Utilization, Non-Cash	0
Ending balance	$ 0

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Business Realignment and Restructuring - Realignment Charges Classified by Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	$ 1,262	$ 34
Cost of Sales
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	175	0
Selling, General and Administrative Expenses
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	1,087	34
Electronics
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	309	0
Electronics | Cost of Sales
Restructuring Cost and Reserve [Line Items]
Restructuring expense	175
Electronics | Selling, General and Administrative Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring expense	134	34
Stoneridge Brazil
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	0	34
Corporate Segment
Restructuring Cost and Reserve [Line Items]
Total business realignment charges	953	$ 0
Corporate Segment | Selling, General and Administrative Expenses
Restructuring Cost and Reserve [Line Items]
Severance costs	$ 953

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit) on operations	$ (708)	$ 1,493
Effective income tax rate	8.70%	(24.20%)

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Segment Reporting (Narrative) (Details)	3 Months Ended
	Mar. 31, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Segment Reporting (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Net Sales:
Net sales	$ 241,325	$ 221,058
Operating (Loss) Income:
Total operating loss	(4,029)	(2,984)
Depreciation and Amortization:
Total depreciation and amortization	8,325	8,706
Interest Expense (Income), net:
Total interest expense, net	2,746	1,786
Total interest expense, net	2,746	1,786
Capital Expenditures:
Total capital expenditures	8,911	7,368
Total Assets:
Total assets	670,738		$ 652,105
Intersegment Eliminations
Net Sales:
Net sales	(9,250)	(8,641)
Total Assets:
Total assets	(372,764)		(371,992)
Control Devices
Net Sales:
Net sales	85,942	84,060
Operating (Loss) Income:
Total operating loss	2,087	6,776
Depreciation and Amortization:
Total depreciation and amortization	3,174	3,561
Interest Expense (Income), net:
Total interest expense, net	18	25
Capital Expenditures:
Total capital expenditures	1,956	3,845
Total Assets:
Total assets	177,154		174,535
Control Devices | Segment Reconciling Items
Net Sales:
Net sales	734	930
Control Devices | Operating Segments
Net Sales:
Net sales	86,676	84,990
Electronics
Net Sales:
Net sales	141,127	124,953
Operating (Loss) Income:
Total operating loss	1,400	(2,712)
Depreciation and Amortization:
Total depreciation and amortization	3,464	3,593
Interest Expense (Income), net:
Total interest expense, net	485	73
Capital Expenditures:
Total capital expenditures	6,207	2,833
Total Assets:
Total assets	380,666		369,232
Electronics | Segment Reconciling Items
Net Sales:
Net sales	8,516	7,711
Electronics | Operating Segments
Net Sales:
Net sales	149,643	132,664
Stoneridge Brazil
Net Sales:
Net sales	14,256	12,045
Operating (Loss) Income:
Total operating loss	1,343	492
Depreciation and Amortization:
Total depreciation and amortization	1,085	991
Interest Expense (Income), net:
Total interest expense, net	(270)	(158)
Capital Expenditures:
Total capital expenditures	636	669
Total Assets:
Total assets	64,128		60,861
Stoneridge Brazil | Segment Reconciling Items
Net Sales:
Net sales	0	0
Stoneridge Brazil | Operating Segments
Net Sales:
Net sales	14,256	12,045
Corporate Segment
Operating (Loss) Income:
Total operating loss	(8,859)	(7,540)
Depreciation and Amortization:
Total depreciation and amortization	602	561
Interest Expense (Income), net:
Total interest expense, net	2,513	1,846
Capital Expenditures:
Total capital expenditures	112	$ 21
Total Assets:
Total assets	$ 421,554		$ 419,469

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Segment Reporting (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Net sales	$ 241,325	$ 221,058
Long-term assets:
Total long-term assets	247,602		$ 242,554
North America
Segment Reporting Information [Line Items]
Net sales	123,726	103,828
Long-term assets:
Total long-term assets	94,451		92,149
South America
Segment Reporting Information [Line Items]
Net sales	14,256	12,045
Long-term assets:
Total long-term assets	32,471		31,796
Europe and Other
Segment Reporting Information [Line Items]
Net sales	103,343	$ 105,185
Long-term assets:
Total long-term assets	$ 120,680		$ 118,609

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Investments (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended		64 Months Ended
	Apr. 29, 2022	Mar. 31, 2023	Mar. 31, 2022	May 15, 2017	Dec. 31, 2022	Dec. 31, 2018	May 16, 2017
Schedule of Equity Method Investments [Line Items]
Fair value and other adjustments		$ (171)	$ (81)
PST Eletronica Ltda
Schedule of Equity Method Investments [Line Items]
Percentage ownership in consolidated subsidiary				74.00%
Percentage of additional noncontrolling interest acquired							26.00%
Fair value of earn-out liability	$ 8,272
Autotech Ventures
Schedule of Equity Method Investments [Line Items]
Expected life of fund		10 years
Autotech Ventures | Venture Capital Funds
Schedule of Equity Method Investments [Line Items]
Investment commitment		$ 10,000				$ 10,000
Ownership percentage		6.50%
Investment		$ 8,473			$ 8,644